Budgeted production cost calculation

Steps:

• Identify fixed costs (unchanged with production volume) and variable costs (per unit).
• Multiply variable cost per unit by 10,000 units.
• Add fixed costs to the total variable costs.
• Sum yields total budgeted production cost.

Why C is correct:

• $21,500 matches the formula: total cost = fixed costs + (variable cost per unit × units produced).

Why the others are wrong:

• A ignores some variable costs, underestimating total.
• B uses incorrect fixed cost amount.
• D overestimates by including non-production expenses.

Final answer: C