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CaHeK987 [17]
3 years ago
8

Sugarland Company is using new cost drivers for its accounting system. One driver material handling for unit variable costs and

number of inspections for a pool of batch-level costs. Data for the past year follow. Budget Actual Material handling 180,000 225,000 Number of inspections 6,000 6,600 Unit variable cost pool$810,000 $1,035,000 Batch-level cost pool$115,200 $126,060 What is the total flexible budget dollar amount for the actual level of material handling and actual number of inspections
Business
1 answer:
Tomtit [17]3 years ago
5 0

Answer:

The total flexible budget dollar amount for the actual level of material handling and actual number of inspections is $1,139,220.

Explanation:

Note: The data in this question are merged together. They are therefore sorted before answering the question as follows:

                                             Budget                  Actual

Material handling                 180,000                225,000

Number of inspections           6,000                     6,600

Unit variable cost pool      $810,000            $1,035,000

Batch-level cost pool          $115,200               $126,060

The explanation of the answer is now given as follows:

These actual amounts are the flexible budget amount with two pools.

Flexible budget dollar amount for the actual level of material handling = (Budgeted Unit variable cost pool / Budgeted Material handling) * Actual Material handling = ($810,000 / 180,000) * 225,000 = $1,012,500

Flexible budget dollar amount for the actual number of inspections = Budgeted Batch-level cost pool / Budgeted Number of inspections) * Actual Number of inspections = ($115,200 / 6,000) * 6,600 = $126,720;

Total flexible budget dollar amount = Flexible budget dollar amount for the actual level of material handling + Flexible budget dollar amount for the actual number of inspections = $1,012,500 + $126,720 = $1,139,220

Therefore, the total flexible budget dollar amount for the actual level of material handling and actual number of inspections is $1,139,220.

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