If the budgeted fixed manufacturing cost is $124000 and the per unit cost is $124, then budgeted production units can be ___________?
Correct answer: B. $1,000
- A. $4,000
- B. $1,000
- C. $2,000
- D. $3,000
Explanation
Budgeted production units are found by dividing total fixed manufacturing cost by fixed manufacturing cost per unit: $124,000 ÷ $124 = 1,000 units. The options show dollar signs, but the result is a number of 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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