Hamiter Framing's cost formula for its supplies cost is $1,640 per month plus $9 per frame. For the month of August, the company planned for activity of 572 frames, but the actual level of activity was 573 frames. The actual supplies cost for the month was $7,080. The supplies cost in the planning budget for August would be closest to:
A) $7,080
B) $7,068
C) $6,788
D) $6,797

Question

Quizplus · Accepted Answer

To find the supplies cost in the planning budget for August, we need to use the cost formula provided:

Planned supplies cost = $1,640 + ($9 per frame x 572 frames) 
Planned supplies cost = $1,640 + $5,148 
Planned supplies cost = $6,788

The actual supplies cost for the month was $7,080, which is greater than the planned supplies cost of $6,788. This indicates that the company spent more on supplies than it had planned for.

Choice C is the closest to the planned supplies cost of $6,788. Therefore, the correct answer is C.

Hamiter Framing's Cost Formula for Its Supplies Cost Is $1,640