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    Flexible Budget

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    The master budget of AXE company is based on a planned volume of activity of 5,000 units

    Revenues are $50,000
    Variable costs $($35,000)
    Constribution margin $15,000
    Fixed costs $ 5,000

    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?

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    https://brainmass.com/business/budgets/flexible-budget-variable-costs-fixed-costs-203224

    Solution Preview

    A. If AXE actually produces 6,000 units, the flexible budget wuld show a total cost of:

    Your calculation is correct. You need to calculate the total cost. The ...

    Solution Summary

    The solution explains how to calculate the variable costs and fixed costs under flexible budget.

    $2.19

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