White Company planned to produce 12,000 units.Processing required 16,000 machine hours at a cost of $15,000 + $12 per machine hour.Actual sales were 14,000 units requiring 20,000 machine hours.Actual processing cost was $222,000._____ is the static budget amount for processing.
A)$207,000
B)$213,500
C)$222,000
D)$225,000

Question

Quizplus · Accepted Answer

To find the static budget amount for processing, we need to calculate the cost of processing 12,000 units at the budgeted rate of $12 per machine hour.
Total budgeted machine hours = 16,000 (for 12,000 units)
Budgeted processing cost = $15,000 + ($12 * 16,000) = $207,000
Therefore, the static budget amount for processing is $207,000, which is option A.

White Company Planned to Produce 12,000 Units