Ohme Framing's cost formula for its supplies cost is $1,620 per month plus $13 per frame. For the month of April, the company planned for activity of 882 frames, but the actual level of activity was 878 frames. The actual supplies cost for the month was $13,500. The supplies cost in the flexible budget for April would be closest to:

Question

Quizplus · Accepted Answer

Flexible budget cost = Fixed cost + (actual activity level × variable cost per unit)
Fixed cost = $1,620
Variable cost per frame = $13
Actual activity level = 878 frames

Flexible budget cost = $1,620 + (878 × $13) = $13,034

Therefore, the supplies cost in the flexible budget for April would be closest to $13,034, which is choice C.

Ohme Framing's Cost Formula for Its Supplies Cost Is $1,620