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 $2.00 per shipment to $1.42 per shipment. (1) If the company budgets 2,000 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 1. Budgeted direct materials 2. Cost savings

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 $2.00 per shipment to $1.42 per shipment.
(1) If the company budgets 2,000 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
1. Budgeted direct materiats
2.
Cost savings
Transcribed Image Text: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 $2.00 per shipment to $1.42 per shipment. (1) If the company budgets 2,000 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 1. Budgeted direct materiats 2. Cost savings
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