Assume that a company provided the following cost formulas for three of its expenses (where q refers to the number of hours worked): Rent (fixed) $ 3,000 Supplies (variable) $ 4.00q Utilities (mixed) $150 + $0.75q The company’s planned level of activity was 2,000 hours and its actual level of activity was 1,900 hours. How much utilities expense would be included in the flexible budget? $1,500 $1,675 $1,575 $1,650
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Assume that a company provided the following cost formulas for three of its expenses (where q refers to the number of hours worked):
Rent (fixed) $ 3,000
Supplies (variable) $ 4.00q
Utilities (mixed) $150 + $0.75q
The company’s planned level of activity was 2,000 hours and its actual level of activity was 1,900 hours. How much utilities expense would be included in the flexible budget?
- $1,500
- $1,675
- $1,575
- $1,650
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