Other expenses" in the planning budget

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Pickrel Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following
fixed and variable cost estimates that it uses for budgeting purposes.
Revenue
Employee salaries and wages
Servicing materials
Other expenses
Fixed Element per
Month
Variable Element per
Well Serviced
$ 5,500
$ 1,300
$ 600
$ 53,700
$ 34,400
When the company prepared its planning budget at the beginning of November, it assumed that 27 wells would have been serviced. However, 31 wells
were actually serviced during November.
The amount shown for "Other expenses" in the planning budget for November would have been closest to:
Transcribed Image Text:Pickrel Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Revenue Employee salaries and wages Servicing materials Other expenses Fixed Element per Month Variable Element per Well Serviced $ 5,500 $ 1,300 $ 600 $ 53,700 $ 34,400 When the company prepared its planning budget at the beginning of November, it assumed that 27 wells would have been serviced. However, 31 wells were actually serviced during November. The amount shown for "Other expenses" in the planning budget for November would have been closest to:
O
O
O
$29,439
$34,100
$33,800
$34,400
Transcribed Image Text:O O O $29,439 $34,100 $33,800 $34,400
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