Management believes it has found a more efficient way to package its products and use less cardboard.
Question:
Management believes it has found a more efficient way to package its products and use less cardboard. This new approach will reduce shipping costs from $10.00 per shipment to $9.25 per shipment.
(1) If the company budgets 1,200 shipments this year, what amount of total direct materials costs would appear on the shipping department’s flexible budget?
(2) How much is this sustainability improvement predicted to save in direct materials costs for this coming year?
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Gabriela Rosalía Castro
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