Pizza Company planned to produce 12,000 units.This level of activities required 40 set-ups at a cost of $18,000 plus $500 per set-up.Actual sales were 10,000 units, requiring 15 set-ups and 12,000 machine hours.Actual set-up cost was $26,000._____ is the static budget amount for set-ups.
A)$26,000
B)$38,000
C)$21,000
D)$25,500

Question

Quizplus · Accepted Answer

The static budget amount for set-ups can be calculated as follows:
Static Budget = 40 set-ups x ($18,000 + $500 per set-up)
Static Budget = $720,000
Therefore, the answer is B) $38,000, which is the closest option.

Pizza Company Planned to Produce 12,000 Units