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

question 5

Multiple Choice

Lauter 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 $5,300 per month plus $480 per press run plus $1,080 per book set-up. The company expected its activity in October to be 169 press runs and 64 book set-ups, but the actual activity was 167 press runs and 60 book set-ups. The actual cost for wages and salaries in October was $155,690.
-The wages and salaries in the flexible budget for October would be closest to:

• A) $155,540
• B) $155,690
• C) $150,260
• D) $153,699

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Definitions:

Job-Based Pay

A compensation strategy where employee pay is determined by the specific job roles and responsibilities rather than the individual's performance or skill level.

Capabilities

The qualities, skills, and capacities that enable individuals or organizations to effectively perform or achieve tasks and objectives.

Geographic-Based Pay

A compensation strategy that adjusts an employee's pay based on the cost of living and market wage rates in the geographic location where they work.

Market Pricing

The process of determining the external value of jobs within an organization by comparing the organization's jobs to similar jobs in the external labor market.