Based on past experience, a company has developed the following budget formula for estimating its shipping expenses. The company's shipments average 18 lbs. per shipment: Shipping costs = $22,000 + ($0.50 × lbs. shipped). The planned activity and actual activity regarding orders and shipments for the current month are given in the following schedule:

	plan	actual
Sales order	860	840
Shipments	860	880
Unit shipped	8600	9400
Sales	126,000	150,000
Total pounds shipped	10,200	12,900

The actual shipping costs for the month amounted to $27,450. The appropriate monthly flexible budget allowance for shipping costs for the purpose of performance evaluation would be:

a) 27,450

b) 33,900

c) 28,450

d) 32,550

Answer rating: 100% (QA)

c 28450 Appropriate monthly flexible budget ... View the full answer