A company budgets administrative salaries at $5,000 at a sales level of 1,000 units. At a sales level of 1,200 units, budgeted administrative salaries will be $

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Multiple Choice

A company budgets administrative salaries at $5,000 at a sales level of 1,000 units. At a sales level of 1,200 units, budgeted administrative salaries will be $

Understanding cost behavior with fixed versus variable costs is the key idea here. Administrative salaries are typically fixed in the short run, meaning they don’t change with the level of production or sales within the relevant range. Since the budget allocates $5,000 for administrative salaries at a 1,000-unit level and there’s no indication of a step change or variable portion, the amount stays the same when volume rises to 1,200 units. So, the budgeted administrative salaries remain $5,000 at 1,200 units. If there were a variable component or a threshold that triggers an increase, the amount could change, but that isn’t suggested in this scenario.

A company budgets administrative salaries at $5,000 at a sales level of 1,000 units. At a sales level of 1,200 units, budgeted administrative salaries will be $

Prepare for the Accounting SmartBook Test. Practice with tailored questions and helpful hints. Analyze comprehensive explanations for a deep understanding. Ace your exam with confidence!

A company budgets administrative salaries at $5,000 at a sales level of 1,000 units. At a sales level of 1,200 units, budgeted administrative salaries will be $

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