US CMA Part 1 · Chapter 2 · Question 18 of 30
A static budget prepared for 10,000 units shows total variable costs of $180,000 and fixed costs of $95,000. Actual output was 11,500 units. What is the total cost in the flexible budget for the actual output (assuming output is within the relevant range)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) $302,000
Explanation
Variable cost per unit = $180,000 / 10,000 = $18. Flexible budget = $18 x 11,500 + $95,000 fixed = $207,000 + $95,000 = $302,000. Fixed costs do not change within the relevant range.
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