Question

Buckson Framing's cost formula for its supplies cost is $1,350 per month plus $18 per frame. For the month of June, the company planned for activity of 716 frames, but the actual level of activity was 713 frames. The actual supplies cost for the month was $14,820. The supplies cost in the flexible budget for June would be closest to___________.
a. $14,820
b. $14,184
c. $14,238
d. $14,178

Answer 1

Answer:

correct option is c. $14,238

Explanation:

given data

supplies cost = $1,350 per month

per frame = $18

actual supplies cost  = $14,820

planned for activity = 716 frames

solution

we get here Total supplies cost in  flexible budget for June that is express as

Total supplies cost = Total planned variable cost + Fixed monthly cost ..........1

and here Total planned variable cost is = 716 × $18 = $12888

put here value in equation 1 we get

Total supplies cost in flexible budget for June =  $12888  + $1,350

Total supplies cost in flexible budget for June =  $14,238  

correct option is c. $14,238