28) Miller and Sons\' static budget for 10,000 units of production includes $50,

Question

28) Miller and Sons' static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, variable utilities of $5,000, and supervisor salaries of $24,000. A flexible budget for 12,000 units of production would show the

a)same cost structure in total

b) direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $29,000

c) direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $24,000

d) total variable costs of $148,000

Explanation / Answer

Miller & Sons Static Budget Flexible Budget Details Total Cost Variable cost/unit Total Cost Units Produced                 10,000                       12,000 Direct Materials                 50,000                   5.00                       60,000 Direct Labors                 44,000                   4.40                       52,800 Vaiable uitilities                    5,000                   0.50                          6,000 Supervisor salary                 24,000                       24,000 Total Cost                 123,000                     142,800 So Option c is correct.

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