Section 10 - Chap 9 - AEM 323 Section Problem Set 10...

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AEM 323 Section Problem Set 10 Covering Material from Chapter 9 Problem 1 a. What is the difference between a flexible budget and a static budget? b. Which type of budget is only prepared at the beginning of a period? c. What are the criteria for selecting an activity base for an overhead flexible budget? d. Factory rent and executive salaries are typically (fixed / variable) costs 1
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Problem 2 A incomplete flexible budget is given below for Lavage Rapide, a Swiss company that owns and operates a arge automatic carwash facility near Geneva. The Swiss currency is the Swiss franc, which is denoted by SFr. Lavage Rapide Flexible Budget For the Month Ended August 31 Cost Formula (per car) Activity(cars) Overhead Costs 8,000 9,000 10,000 Variable overhead costs: Cleaning supplies 0.80 6,400 7,200SFr 8,000 Electricity 0.20 1,600 1,800 2,000 Maintenance 0.30 2,400 2,700 3,000 Total variable overhead cost 1.30 10,400 11,700 13,000 Fixed overhead costs: Operator wages 8,000 8,000 8,000 Depreciation
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Section 10 - Chap 9 - AEM 323 Section Problem Set 10...

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