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The traceable fixed and variable costs of the purchasing activity center are $260,000. An analysis of the center's cost behavior showed a fixed cost of $100,000 and the appropriate cost driver to be the number of lines inputted. The total number of lines inputted is 2,000,000.
-What would the total flexible overhead budget if the number of lines decreased to 1,800,000?
A) $334,000
B) $404,000
C) $244,000
D) $234.000

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The variable cost per line is $80,000 ($260,000 - $100,000) / 2,000,000. The total flexible overhead budget if the number of lines decreased to 1,800,000 would be $244,000 ($100,000 + $80,000 * 1,800,000).

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