The master budget of AXE company is based on a planned volume of activity of 5,000 units
A. If AXE actually produces 6,000 units, the flexible budget wuld show a total cost of:
I ran the computation as follows and want ot make sure this is correct:
$35,000 divided by 5,000 = $7
The answer would then be $7 x 6,000 units would equal $42,000
B. The second part of this question is If AXE actually produced 4,5000, the flexible budget would show fixed costs amounting to:
I ran the computation and figured the cost per unit would be $1.00 so the flexible costs would be $4500. Is this correct?
The solution explains how to calculate the variable costs and fixed costs under flexible budget