Question
Jasper Company developed the following flexible budget formulas for its three overhead items: overhead item Fixed costVariable Rate per Unit Power1,5006.00Indirect Labor 6.00Equipment Lease7,000 Total8,5006.50
Jasper Company developed the following flexible budget formulas for its three overhead items:
overhead item Fixed costVariable Rate per Unit Power1,5006.00Indirect Labor 6.00Equipment Lease7,000 Total8,5006.50Jasper's accountant developed an overhead budget showing overhead costs by category for 1,000 units, 2,000 units, and 3,000 units. Which of the following is true?
a. The total budgeted overhead is the same for 1,000 units, 2,000 units, and 3,000 units.
b. The budgeted amounts for 3,000 units are 50% higher than the budgeted amounts for 2,000 units.
c. The budgeted amounts for 2,000 units are higher than the budgeted amounts for 1,000 units but not by twice as much.
d. The budgeted amounts for 2,000 units are twice as high as the budgeted amounts for 1,000 units.
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