Campbell, Inc., has an operating environment with considerable uncertainty.The company prepares the budget for several different volume levels. Campbell had the following budgeted data:

-What are the budgeted costs for materials if 5,000 units were produced?
A) $9,000
B) $4,000
C) $50,000
D) $35,000

Question

Campbell, Inc., has an operating environment with considerable uncertainty.The company prepares the budget for several different volume levels. Campbell had the following budgeted data:
 
-What are the budgeted costs for materials if 5,000 units were produced?
A) $9,000 
B) $4,000 
C) $50,000 
D) $35,000

Quizplus · Accepted Answer

The budgeted material cost per unit is $7. The budgeted cost for materials at 7,000 unit level is $49,000. To calculate the budgeted cost of materials at 5,000 unit level:
Budgeted material cost per unit × Number of units = Budgeted cost for materials
$7 × 5,000 = $35,000 
Therefore, the answer is option D, $35,000.