Question

Hamiter Framing's cost formula for its supplies cost is $1,640 per month plus $9 per frame. For the month of August, the company planned for activity of 572 frames, but the actual level of activity was 573 frames. The actual supplies cost for the month was $7,080. The supplies cost in the planning budget for August would be closest to:

Answer 1

Answer:

$6,788

Explanation:

The computation of the supplies cost in the planning budget is shown below:

= Supplies cost per month + number of frames in planned activity × per frame cost

= $1,640 + 572 frames × $9

= $1,640 + $5,148

= $6,788

We simply added the supplies cost and the planned frame cost so that the supplies cost for the planning budget could come