Apply the Concepts
Campbell Company has a "maintaining equipment" activity and wants to develop a flexible budget formula for the activity. The following resources are used by the activity:
Three portable diagnostic units, with a lease cost of $ per year per unit
Three maintenance personnel each paid a salary of $ per year A total of maintenance hours are supplied by the three workers.
Parts and supplies: $ per diagnosis
Maintenance hours: Five hours used per diagnosis
During the year, the activity operated at percent of capacity and incurred the following actual activity and resource costs:
Leasecost: $
Salaries: $
Parts and supplies: $
Required:
Prepare a flexible budgeting formula for the maintenance activity using maintenance hours as the driver:
Fixed costs resources acquired in advance of usage: $
Variable cost per maintenance hour acquired as needed:
