red company developed a static budget at the beginning of the company's accounting period based on an expected volume of 8,000 units: per unit revenue $ 4.00 variable costs 1.50 contribution margin $ 2.50 fixed costs 2.00 net income $ 0.50 if actual production totals 10,000 units, which is within the relevant range, the flexible budget would show fixed costs of:

Fixed costs are expenses that remain constant regardless of whether sales or production volumes rise or fall. This is so because they are not involved in the actual process of producing a something or providing a service. Fixed costs are therefore regarded as indirect costs.
The amount of product generated determines the fluctuation in variable costs. Raw materials, labour, and commissions are examples of variable expenses. Regardless of the level of production, fixed expenses stay constant. Lease and rental payments, insurance, and interest payments are examples of fixed expenses.
Examples of fixed costs include depreciation, interest on capital, rent, salaries, property taxes, insurance premiums, etc.

Given data:

Based on 8,000 units:

Total budgeted fixed costs = 8,000 units × $2.00 per unit = $16,000

This amount is unchanged if the flexible budget is prepared at a level of 10,000 units.

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