The company expects to perform 25 setups in May.
-Refer to Figure 11-6. Prepare a flexible budget formula for the moving materials activity.
A) $880,000 + $1.71* moves
B) $1,450,000 + $3.80 * moves
C) $905,000 + $.45 * moves
D) $1,080,000 + $1.71 * moves
E) $850,000 + $2.00 * moves

Question

The company expects to perform 25 setups in May.
-Refer to Figure 11-6. Prepare a flexible budget formula for the moving materials activity.
A) $880,000 + $1.71* moves 
B) $1,450,000 + $3.80 * moves 
C) $905,000 + $.45 * moves 
D) $1,080,000 + $1.71 * moves 
E) $850,000 + $2.00 * moves

Quizplus · Accepted Answer

Looking at the chart, we can see that the formula for moving materials is $1,080,000 + $1.71 per move. To incorporate the level of activity, we simply substitute F1F1F10 moves for the number of moves. Therefore, the correct flexible budget formula for moving materials is $1,080,000 + $1.71 F1F1F1S1F1F1F10 moves.

The Company Expects to Perform 25 Setups in May