Based on past experience, Moss Company has developed the following budget formula for estimating its...
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Accounting
Based on past experience, Moss Company has developed the following budget formula for estimating its shipping expenses:
Shipping costs = $18,500 + ($0.50 lbs. shipped). The company's shipments average 14 lbs. per shipment.
The planned activity and actual activity regarding orders and shipments for the current month are given in the following schedule:
Plan
Actual
Sales orders
850
830
Shipments
850
870
Units shipped
8,500
9,500
Sales
$
125,000
$
149,000
Total pounds shipped
10,100
12,800
The actual shipping costs for the month amounted to $23,500. The appropriate monthly flexible budget allowance for shipping costs for the purpose of performance evaluation would be: (CMA adapted)
$23,250.
$28,550.
$23,550.
$24,900.
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