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uestions Navigation Menu ing activity and wants to develop a flexible budget formula for the activity. The following resource

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Answer #1

Answer:-

Fixed costs:

Welding units(15,000×4)=$60,000

Welders salaries(47,000×6)=$282,000

Total fixed costs=$342,000

Variable costs:

Welding supplies:$400/=$100 per welding hour(X)

Formula :

Welding cost=$342,000+$100X

2.

Activity actual cost budgeted cost(80%) Budget variance variance
Welding:

Fixed cost

$356,100

(60000+296,100)

$342,000

$14,100

U

Variable cost

$955,300

$960,000

($100×12000×80%)

$4700

F

3.

Welding cost=$60,000+$130X

Cost of welding equipment is fixed. Variable cost is the $30 per hour of contract welding plus the $100 per hour for parts and supplies.

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