If the budgeted fixed cost is $26000, per unit budgeted denominator level is 1300 units, then budgeted fixed cost will be ___________?
Correct answer: C. $20
- A. $50
- B. $30
- C. $20
- D. $40
Explanation
The budgeted fixed overhead rate is calculated by dividing budgeted fixed cost by the denominator activity level: $26,000 ÷ 1,300 units = $20 per unit. This makes option c correct.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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