Dreckman Corporation Is a Service Company That Measures Its Output

question 419

Multiple Choice

Dreckman Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for August. When the company prepared its planning budget at the beginning of August, it assumed that 36 customers would have been served. However, 31 customers were actually served during August.The "Other expenses" in the flexible budget for August would have been closest to:

• A) $33,500
• B) $38,903
• C) $28,847
• D) $33,100

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Definitions:

Fear of Punishment

The anticipation of experiencing negative consequences or sanctions as a result of engaging in wrongful or illegal acts, often used as a deterrent.

Deterrence

A strategy aimed at preventing undesirable actions by instilling fear of consequences.

Deterrent Effect

The principle or effect of discouraging criminal behavior through the fear of punishment.

Little Agreement

A situation where there is minimal consensus or common ground among parties or individuals involved.