Cardero Midwifery's cost formula for its wages and salaries is $2,280 per month plus $348 per birth. For the month of August, the company planned for activity of 118 births, but the actual level of activity was 116 births. The actual wages and salaries for the month was $44,120. The wages and salaries in the planning budget for August would be closest to:
A) $44,881
B) $44,120
C) $43,344
D) $42,648

Question

Quizplus · Accepted Answer

Using the cost formula given, we can calculate the total wages and salaries budgeted for the planned level of activity:

$2,280 + ($348 per birth × 118 births) = $43,344

Since the actual level of activity was slightly lower than planned (116 instead of 118), we would expect the actual wages and salaries to be slightly lower than the budgeted amount. The closest option to the calculated budgeted amount is therefore C: $43,344.

Cardero Midwifery's Cost Formula for Its Wages and Salaries Is