Kudej Printing uses two measures of activity, press runs and book set-ups, in the cost formulas in its budgets and performance reports. The cost formula for wages and salaries is $8,360 per month plus $570 per press run plus $910 per book set-up. The company expected its activity in May to be 194 press runs and 74 book set-ups, but the actual activity was 195 press runs and 72 book set-ups. The actual cost for wages and salaries in May was $188,370. The wages and salaries in the flexible budget for May would be closest to:
A)$185,030
B)$186,280
C)$188,370
D)$187,240

Question

Quizplus · Accepted Answer

The flexible budget for wages and salaries would be:$8,360 + ($570 x 195) + ($910 x 72) = $185,030

Kudej Printing Uses Two Measures of Activity, Press Runs and Book