Asked by Rebecca Dooley on Jul 29, 2024
Verified
Pratte Boat Wash's cost formula for its cleaning equipment and supplies is $2,460 per month plus $49 per boat. For the month of April, the company planned for activity of 58 boats, but the actual level of activity was 18 boats. The actual cleaning equipment and supplies for the month was $3,470.The cleaning equipment and supplies in the flexible budget for April would be closest to:
A) $3,342
B) $5,302
C) $3,470
D) $1,645
Flexible Budget
An adaptable budget that shifts based on variations in activity or volume.
Cleaning Equipment
Tools, appliances, or devices used for cleaning purposes, ranging from simple manual tools to complex machinery.
Cost Formula
A mathematical equation or method used to compute the total costs associated with the production or provision of goods or services.
- Absorb the intricacies of a flexible budget and its corresponding adjustments.
Verified Answer
JW
Jeremy WatsonAug 04, 2024
Final Answer :
A
Explanation :
The flexible budget for cleaning equipment and supplies is calculated based on the actual activity level. The cost formula is $2,460 fixed cost per month plus $49 per boat. For 18 boats, the calculation is $2,460 + ($49 * 18) = $2,460 + $882 = $3,342.
Learning Objectives
- Absorb the intricacies of a flexible budget and its corresponding adjustments.
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