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sume that a company provided the following cost formulas for three of its expenses (where q refers to the number of hours worked):   Rent (fixed) $ 3,000 Supplies (variable) $ 4.00q Utilities (mixed) $150 + $0.75q The company’s p

sume that a company provided the following cost formulas for three of its expenses (where q refers to the number of hours worked):   Rent (fixed) $ 3,000 Supplies (variable) $ 4.00q Utilities (mixed) $150 + $0.75q The company’s p

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2CMA
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Assume that a company provided the following cost formulas for three of its expenses (where q refers to the number of hours worked):
 

Rent (fixed) $ 3,000
Supplies (variable) $ 4.00q
Utilities (mixed) $150 + $0.75q


The company’s planned level of activity was 2,000 hours and its actual level of activity was 1,900 hours. If these are the company’s only three expenses and the company uses revenue formula of $8.40q for budgeting purposes, what net operating income would appear in the company’s flexible budget?

 

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