Answer (D) is correct . The units to be produced in February equal 50% of March sales, or 16,500 units (33,000 ¡Á .5). The unit variable cost is $7.00 ($3.50 + $1.00 + $2.00 + $.50), so total variable costs are $115,500 (16,500 ¡Á $7). Thus, the dollar production budget for February is $127,500 ($115,500 variable + $12,000 fixed).Answer (A) is incorrect because The amount of $327,000 is based on January sales.
Answer (B) is incorrect because The production budget for January is $390,000.
Answer (C) is incorrect because The production budget for April is $113,500.
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Daffy Tunes’ dollar production budget for toy rabbits for February is
