If the budgeted fixed cost is $40000 and budgeted fixed cost is $16 per unit, then budgeted denominator level will be __________?
Correct answer: B. 2500 units
- A. 3500 units
- B. 2500 units
- C. 3900 units
- D. 4900 units
Explanation
The budgeted denominator level is calculated as budgeted fixed cost divided by the fixed cost rate per unit: $40,000 ÷ $16 = 2,500 units.
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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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