At 12,000 units of production, a flexible budget would show what?Scott Manufacturing Co.'s static budget at 10,000 units of production includes...

I wonder if you might have made a mistake in typing in the
answer choices.  I would say that C is the best possible answer, but it really should
have variable costs of $52,800 and not $52,000.

A cannot be
the right answer because it has a different level of fixed costs than the budget had at
10,000 units.  Fixed costs are fixed; they do not change as the level of production
rises.

B and D cannot be right.  They both have the same
total costs for 12,000 units as for 10,000.  This is not
possible.

To get the most likely amount of variable costs
for the 12,000 units, we need to find the average variable costs (AVCs) at 10,000
units.  The total variable costs (TVCs) at that output are $44,000.  Divided by 10,000
units, that gives us an AVC of $4.4 per unit.  Multiply that by 12,000 units and you get
a TVC of $52,800.

So, if the AVC at 12,000 units is the
same as the AVC at 10,000 units, then the TVC at 12,000 units must be
$52,800.

So, C is the only possible answer, but I would
think the TVC should be $52,800 and not $52,000.