A. Fixed costs are the same ($600,000) regardless to the level of production. This answer is calculated incorrectly by adjusting the fixed costs downward for production. Variable labor costs, however, change with the level of production and need to be $9,500,000 [($10,000,000 ÷ 10,000) × 9,500].

B. Fixed costs are the same regardless to the level of production. This answer is calculated incorrectly by adjusting the fixed costs downward for production.

C. This is the variable labor costs only [($10,000,000 / 10,000) × 9,500].

D. The annual budgeted fixed costs for the normal capacity level of 10,000 articles reviewed and edited is $600,000 and it is the same for any other level of output, as fixed costs do not vary with the production level. The standard labor costs for the 9,500 articles is $9,500,000 [($10,000,000 ÷ 10,000) × 9,500]. The fixed costs plus the labor cost equal the total flexible budget cost planned for the review and editing of 9,500 articles: $600,000 + $9,500,000 = $10,100,000.