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Kaplan Text book, Budgeting, Test your understanding 14
A company manufactures cell phones and has developed a new cell phone called “H”. The max production capacity is 150000 units, management accountant is preparing an annual flexible budget
“000 “000 “000
Production(units) 100 120 150
Mat costs$ 700 840 1050
Lab costs 750 900 1125
Incremental fix costs 60 60 60
What would be the flexed budget total production cost if production cost if production is 90% of maximum capacity?
The only part of this that I didn’t understood how to deal with incremental fixed costs kindly help please
The fixed costs will remain at 60, by definition they will stay fixed.
Thanks but if you see the solution their is Stepped supervisor costs God knows from where this cost is taken !
I do not have the Kaplan text book and so without seeing the whole question I am unable to help.
