Jones Company developed the following static budget at the beginning of the company's accounting period:$16,0004,000$12,0004,000$ 8,000Revenue (8,000 units)Variable costsContribution marginFixed costsNet incomeIf actual production totals 8,200 units, the flexible budget would show total costs of:Multiple Choice$8,000.$8,100.$8,200.None of these is correct.

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Asked Dec 3, 2019
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Jones Company developed the following static budget at the beginning of the company's accounting period:
$16,000
4,000
$12,000
4,000
$ 8,000
Revenue (8,000 units)
Variable costs
Contribution margin
Fixed costs
Net income
If actual production totals 8,200 units, the flexible budget would show total costs of:
Multiple Choice
$8,000.
$8,100.
$8,200.
None of these is correct.
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Jones Company developed the following static budget at the beginning of the company's accounting period: $16,000 4,000 $12,000 4,000 $ 8,000 Revenue (8,000 units) Variable costs Contribution margin Fixed costs Net income If actual production totals 8,200 units, the flexible budget would show total costs of: Multiple Choice $8,000. $8,100. $8,200. None of these is correct.

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Expert Answer

Step 1

Budget for 8200 units:

 

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per unit (S Amount (S) $16,400 Revenue $2 Variable costs $1 $4,100 $12,300 $4,000 $8.300 Contribution margin $2 Fixed costs Net income

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Step 2

compute the total cost:

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Total cost Variable cost + Fixed cost = $4100 $4000 $8,100 Therefore, second option ($8,100) is correct answer

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