Activity$-$Based Flexible Budgeting

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:

$$ Four welding units, with a lease cost of $$12,000$ per year per unit

$$ Six welding employees each paid a salary of $$50,000$ per year $($A total of $9,000$ welding hours are supplied by the six workers.$)$

$$ Welding supplies: $$300$ per job

$$ Welding hours: Three hours used per job

During the year, the activity operated at $90$ percent of capacity and incurred the following actual activity and resource costs.

$$ Lease cost: $$48,000$

$$ Salaries: $$315,000$

$$ Parts and supplies: $$805,000$

Required:

Question Content Area

$1.$ Prepare a flexible budget formula for the welding activity using welding hours as the driver.

Welding cost $=$ $fill in the blank ae$38$c$401000$c$059\_1+$ $fill in the blank ae$38$c$401000$c$059\_2$ X

Feedback Area