Based on past experience, Moss Company has developed the following budget formula for estimating its shipping expenses: Shipping costs = $21,000 + ($0.40 × pounds shipped). The company's shipments average 13 pounds per shipment. The planned activity and actual activity regarding orders and shipments for the current month are given in the following schedule: Plan Actual Sales orders 900 880 Shipments 900 920 Units shipped 9,000 10,000 Sales $ 130,000 $ 154,000 Total pounds shipped 10,600 13,300 The actual shipping costs for the month amounted to $26,000. The appropriate monthly flexible budget allowance for shipping costs for the purpose of performance evaluation would be:
Based on past experience, Moss Company has developed the following budget formula for estimating its shipping expenses: Shipping costs = $21,000 + ($0.40 × pounds shipped). The company's shipments average 13 pounds per shipment. The planned activity and actual activity regarding orders and shipments for the current month are given in the following schedule: Plan Actual Sales orders 900 880 Shipments 900 920 Units shipped 9,000 10,000 Sales $ 130,000 $ 154,000 Total pounds shipped 10,600 13,300 The actual shipping costs for the month amounted to $26,000. The appropriate monthly flexible budget allowance for shipping costs for the purpose of performance evaluation would be:
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
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Based on past experience, Moss Company has developed the following budget formula for estimating its shipping expenses:
Shipping costs = $21,000 + ($0.40 × pounds shipped). The company's shipments average 13 pounds per shipment.
The planned activity and actual activity regarding orders and shipments for the current month are given in the following
| Plan | Actual | |
|---|---|---|
| Sales orders | 900 | 880 |
| Shipments | 900 | 920 |
| Units shipped | 9,000 | 10,000 |
| Sales | $ 130,000 | $ 154,000 |
| Total pounds shipped | 10,600 | 13,300 |
The actual shipping costs for the month amounted to $26,000. The appropriate monthly flexible budget allowance for shipping costs for the purpose of performance evaluation would be:
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