Commerce Corporation has a high probability of operating at 40,000 activity hours during the upcoming period, and lower probabilities of operating at 30,000 hours and 50,000 hours.The company's ﬂexible budget revealed the following: Commerce's ﬂexible-budget formula, where Y is deﬁned as total cost and AH represents activity hours, is:
A)Y = $4.50AH + $24AH.
B)Y = $4.50AH + $720,000.
C)Y = $22.50AH.
D)Y = $180,000 + $18AH.
E)Y = $945,000.

Question

Commerce Corporation has a high probability of operating at 40,000 activity hours during the upcoming period, and lower probabilities of operating at 30,000 hours and 50,000 hours.The company's ﬂexible budget revealed the following:  Commerce's ﬂexible-budget formula, where Y is deﬁned as total cost and AH represents activity hours, is:
A)Y = $4.50AH + $24AH. 
B)Y = $4.50AH + $720,000. 
C)Y = $22.50AH. 
D)Y = $180,000 + $18AH. 
E)Y = $945,000.

Quizplus · Accepted Answer

The Answer of Commerce Corporation has a high probability of operating at 40,000 activity hours during the upcoming period, and lower probabilities of operating at 30,000 hours and 50,000 hours.The company's ﬂexible budget revealed the following:  Commerce's ﬂexible-budget formula, where Y is deﬁned as total cost and AH represents activity hours, is:
A)Y = $4.50AH + $24AH. 
B)Y = $4.50AH + $720,000. 
C)Y = $22.50AH. 
D)Y = $180,000 + $18AH. 
E)Y = $945,000.

Commerce Corporation Has a High Probability of Operating at 40,000