Question

Oriole Company’s budgeted manufacturing costs for 55000 squares of shingles are: Fixed manufacturing costs $12000 Variable manufacturing costs $16 per square. Oriole produced 40000 squares of shingles during March. How much are budgeted total manufacturing costs in March?

Answer 1

Answer:

$652,000

Explanation:

Budgeted total manufacturing costs for Oriole Company, for the month of March, is given by the fixed manufacturing cost ($12,000) added to the variable manufacturing cost for an output of 40,000 squares of shingles at a rate of $16 per square:

$C = \ 12,000+(40,000*\ 16)\\C=\ 652,000$

Budgeted total manufacturing costs in March are $652,000.

*Note that the fixed manufacturing cost does NOT change with a change in output.