Schoening Corporation Is a Shipping Container Refurbishment Company That Measures

question 323

Multiple Choice

Schoening Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for January. When the company prepared its planning budget at the beginning of January, it assumed that 40 containers would have been refurbished. However, 38 containers were actually refurbished during January.The total expenses in the flexible budget for January would have been closest to:

• A) $160,500
• B) $160,200
• C) $163,800
• D) $168,947

---

Definitions:

Contribution Margin

The difference between sales revenue and variable costs of a product or service, used to cover fixed costs and to generate profit.

Fixed Costs

Costs that do not change with the level of production or business activity, such as rent, salaries, and insurance premiums.

Full-Service Contract

An agreement that provides a complete range of services related to a specific product, property, or activity, including maintenance, repairs, and often replacements.

Profit

The financial gain achieved when the revenue from business activities exceeds the expenses, costs, and taxes involved in maintaining the operation.