Privitera Printing uses two measures of activity, press runs and book set-ups, in the cost formulas in its budgets and performance reports. The cost formula for wages and salaries is $7,220 per month plus $650 per press run plus $1,110 per book set-up. The company expected its activity in January to be 188 press runs and 117 book set-ups, but the actual activity was 191 press runs and 114 book set-ups. The actual cost for wages and salaries in January was $269,270.
-The wages and salaries in the flexible budget for January would be closest to:
A)$259,290
B)$269,270
C)$263,428
D)$257,910

Question

Quizplus · Accepted Answer

Cost = Fixed cost + Variable cost per unit1 F1F1F1S1F1F1F10 q1 + Variable cost per unit2 F1F1F1S1F1F1F10 q2
= $7,220 + $650 F1F1F1S1F1F1F10 191 + $1,110 F1F1F1S1F1F1F10 114 = $257,910

Privitera Printing Uses Two Measures of Activity, Press Runs and Book