A factory produces 50,000 units for the month of June, although its budgeted output was 40,000 units. In this case:

Multiple Choice

• Actual cost per unit will be higher than standard cost per unit.
• Actual fixed costs per unit may be expected to exceed budgeted levels.
• Both total production costs and unit production costs should be approximately 25% above budgeted levels.
• A comparison of budgeted results and actual results will be misleading unless the company uses a flexible budget.