Louis Company planned to produce 12,000 units. This level of activities required 20 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 flexible budget amount for set- ups.

Question

Quizplus · Accepted Answer

The flexible budget for set-ups is calculated based on the actual level of activity, which is 15 set-ups. The cost is $18,000 plus $500 per set-up, so the flexible budget amount is $18,000 + (15 * $500) = $25,500.

Louis Company Planned to Produce 12,000 Units