Question

A&B Inc cost formula for its supplies cost is $1,620 per month plus $13 per frame. For the month of April, the company planned for activity of 882 frames, but the actual level of activity was 878 frames. The actual supplies cost for the month was $13,500. The supplies cost in the flexible budget for April would be closest to:

Answer 1

$13,034

Step-by-step explanation:

The computation of the supplies cost is shown below:

= Fixed cost + variable cost

where,

Fixed cost is $1,620

And, the variable cost

= Actual level of activity × per frame

= 878 frames × $13

= $11,414

Now put these values to the above formula

So, the value would be equal to

= $,1,620 + $11,414

= $13,034

We simply added the fixed cost and the variable cost.