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A master budget shows a total of $140,000 in variable costs and $100,000 in fixed costs for an activity level of 10,000 units. A flexible budget based on 12,000 units will show $ in variable costs and $ in fixed costs. (Enter your answers as whole numbers.)

Question

A master budget shows a total of 140,000invariablecostsand140,000 in variable costs and 100,000 in fixed costs for an activity level of 10,000 units. A flexible budget based on 12,000 units will show invariablecostsand in variable costs and in fixed costs. (Enter your answers as whole numbers.)

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Solution

The variable cost per unit can be calculated by dividing the total variable costs by the activity level. In this case, that would be 140,000/10,000units=140,000 / 10,000 units = 14 per unit.

For a flexible budget based on 12,000 units, the variable costs would be 12,000 units * 14/unit=14/unit = 168,000.

Fixed costs do not change with the level of activity, so the fixed costs would remain at $100,000.

So, a flexible budget based on 12,000 units will show 168,000invariablecostsand168,000 in variable costs and 100,000 in fixed costs.

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