Burruss Company developed a static budget at the beginning of the company's accounting period based on an expected volume of 7,000 units:

	Per Unit
Revenue	$	8.00
Variable costs		3.00
Contribution margin	$	5.00
Fixed costs		3.00
Net income	$	2.00

If actual production totals 8,000 units which is within the relevant range, the flexible budget would show fixed costs of:

Multiple Choice

• $21,000.

• $3 per unit.

• $24,000.

• None of these answers is correct.