Garner Company planned to produce 12,000 units. Processing required 16,000 machine hours at a cost of $15,000 + $10.50 per machine hour. Actual sales were 14,000 units requiring 20,000 machine hours. Actual processing cost was $222,000. _ is the flexible budget amount for processing.
A) $222,000
B) $188,000
C) $225,000
D) $213,500

Question

Quizplus · Accepted Answer

The flexible budget amount for processing is calculated based on the actual machine hours used. The formula is $15,000 + ($10.50 * actual machine hours). For 20,000 machine hours, it is $15,000 + ($10.50 * 20,000) = $225,000.

Garner Company Planned to Produce 12,000 Units