Based on past experience, Moss Company has developed the following budget formula for estimating its shipping expenses:
Shipping costs = $18,500 + ($0.50 × lbs. shipped). The company's shipments average 14 lbs. per shipment.
The planned activity and actual activity regarding orders and shipments for the current month are given in the following schedule:
Plan | Actual | ||||||
Sales orders | 850 | 830 | |||||
Shipments | 850 | 870 | |||||
Units shipped | 8,500 | 9,500 | |||||
Sales | $ | 125,000 | $ | 149,000 | |||
Total pounds shipped | 10,100 | 12,800 | |||||
The actual shipping costs for the month amounted to $23,500. The appropriate monthly flexible budget allowance for shipping costs for the purpose of performance evaluation would be: (CMA adapted)
$23,250.
$28,550.
$23,550.
$24,900.
The appropriate monthly flexible budget allowance for shipping costs for the purpose of performance evaluation would be = 18,500 + (0.50*total pounds actually shipped) = 18,500 + (0.50*12,800) = 24,900 |
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Based on past experience, Moss Company has developed the following budget formula for estimating its shipping...
Based on past experience, Moss Company has developed the following budget formula for estimating its shipping expenses: Shipping costs = $22,000+ $0.50 - lbs. shipped). The company's shipments average 15 lbs. per shipment. The planned activity and actual activity regarding orders and shipments for the current month are given in the following schedule: Sales orders Shipments Units shipped Sales Total pounds shipped Plan 920 920 9,200 $132,000 10,800 Actual 900 940 10,200 $156,000 13,500 The actual shipping costs for the...