Prowse Corporation Is an Oil Well Service Company That Measures

question 104

Multiple Choice

Prowse Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes.
A total of 42 wells were actually serviced during October.
-The "Servicing materials" in the flexible budget for October would have been closest to:

• A) $25,200
• B) $24,900
• C) $22,200
• D) $21,936

---

Definitions:

Suppliers

Entities that provide goods or services to another organization, often part of the supply chain.

Lot Sizes

The quantity of units produced, purchased, or sold in a single operation or transaction, often optimized for efficiency in production and inventory management.

Product Changes

Modifications or improvements made to a product’s design, specifications, or features to enhance its performance, appeal, or compliance with regulations.

JIT Partnerships

Collaborations between suppliers and manufacturers that follow Just-In-Time inventory principles to reduce waste and increase efficiency.