Answer:
B. $ 1,984,000 $ 2,112,000
Explanation:
Static budget is a budget that has been prepared for a standard level of output with no tendency to vary irrespective of the level of output.
Therefore, the figure that will appear in static budget is as follows:
Y = $16PH + $640,000 where PH is defined as process hours
PH = 84,000 (Budgeted output)
Y = $16(84,000) + $640,000
Y = $1,344,000 + $640,000
Y = $1,984,000
That is the figure that will appear in the static budget is $1,984,000
Flexible budget is a budget designed to vary with the level of actual activity.
Therefore the figure that will appear in the flexible budget is as follows:
Y = $16PH + $640,000 where PH is defined as process hours
PH = 92,000 (Budgeted output)
Y = $16(92,000) + $640,000
Y = $1,472,000 + $640,000
Y = $2,112,000
That is the figure that will appear in the flexible budget is $2,112,000
