Kudej Printing Uses Two Measures of Activity, Press Runs and Book

question 232

Multiple Choice

Kudej Printing uses two measures of activity, press runs and book set-ups, in the cost formulas in its budgets and performance reports. The cost formula for wages and salaries is $8,360 per month plus $570 per press run plus $910 per book set-up. The company expected its activity in May to be 194 press runs and 74 book set-ups, but the actual activity was 195 press runs and 72 book set-ups. The actual cost for wages and salaries in May was $188,370. The wages and salaries in the flexible budget for May would be closest to:

• A)$185,030
• B)$186,280
• C)$188,370
• D)$187,240

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Definitions:

Commercial Project

A project that is undertaken by a business or a company aiming to generate profit or revenue. It can include anything from launching a new product to constructing commercial real estate.

Skunkworks

An informal project team established to develop an innovative product or process, often with autonomy from an organization's regular research and development procedures.

Angel Investment

Funding provided by affluent individuals to startups at early stages in exchange for equity or ownership stake.