Based on past experience, a company has developed the following budget formula for estimating its shipping expenses.

The company's shipments average 14 lbs. per shipment: Shipping costs = $18,000 + ($0.50 lbs. shipped).

The planned activity and actual activity regarding orders and shipments for the current month are given in the following schedule:

Plan Actual

Sales orders 820 800

Shipments 820 840

Units shipped 8,200 9,000

Sales $ 122,000 $146,000

Total pounds shipped 9,800 12,500

The actual shipping costs for the month amounted to $23,250. The appropriate monthly flexible budget allowance for shipping costs for the purpose of performance evaluation would be:

$29,500.

$23,250.

$24,250.

$28,150.