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Foy Company has a welding activity and wants to develop a flexible budget formula for the activity. The following resources are used by the activity:
-Four welding units, with a lease cost of $15,000 per year per unit
-Six welding employees each paid a salary of $46,000 per year (A total of 9,000 welding hours are supplied by the six workers.)
-Welding supplies: $300 per job
-Welding hours: 3 hours used per job
During the year, the activity operated at 80 percent of capacity and incurred the following actual activity and resource costs.
-Lease cost: $60,000
-Salaries: $289,800
-Parts and supplies: $715,400
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