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

question 94

Multiple Choice

Privitera 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 $7,220 per month plus $650 per press run plus $1,110 per book set-up. The company expected its activity in January to be 188 press runs and 117 book set-ups, but the actual activity was 191 press runs and 114 book set-ups. The actual cost for wages and salaries in January was $269,270.
-The wages and salaries in the flexible budget for January would be closest to:

• A)$259,290
• B)$269,270
• C)$263,428
• D)$257,910

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Definitions:

Allowance

An amount of money given regularly for a specific purpose or to cover expenses, often by parents to their children.

Lollipops

A type of confectionery consisting mainly of hardened, flavored sucrose with corn syrup mounted on a stick.

Oatmeal

A type of coarse flour made by grinding oats, commonly eaten as a cereal cooked with water or milk.

Budget Line

A visual depiction displaying every combination of two items a consumer is able to purchase with their income, based on the costs of these goods.