Business and finance: how much is the expected total variable cost on the August budget?

User Generated

Fcrafre_sna

Business Finance

Description

Aaron's chairs is in the process of preparing a production cost budget for August. Actual costs in July for 120 chairs were:

Materials cost$4,540
Labor cost2,740
Rent1,500
Depreciation2,500
Other fixed costs

3,200

Materials and labor are the only variable costs. If production and sales are budgeted to increase to 130 chairs in August, how much is the expected total variable cost on the August budget?


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Explanation & Answer


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