If the fixed budgeted manufacturing cost is $35000 and the budgeted production units are 7000, then budgeted fixed manufacturing cost per unit will be ___________?
Correct answer: B. $5
- A. $20
- B. $5
- C. $10
- D. $15
Explanation
Budgeted fixed manufacturing cost per unit equals total fixed manufacturing cost divided by budgeted production: $35,000 ÷ 7,000 = $5 per unit. Fixed cost per unit is based on the expected production volume.
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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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