Question

Assume that the two separate pools are used. The flexible budget amounts for the actual level of machine hours and actual number of setups are:

Unit Variable Cost Pool Batch-Level Cost Pool

A. $1,600,000 $900,000

B. $1,600,000 $990,000

C. $2,000,000 $900,000

D. $2,000,000 $990,000

E. $2,500,000 $0

Answer 1

The correct answer is option C with a unit variable cost pool of $2,000,000 and a batch-level cost pool of $900,000.

Step-by-step explanation:

The correct answer is option C. The flexible budget amounts for the actual level of machine hours and actual number of setups are: Unit Variable Cost Pool = $2,000,000 and Batch-Level Cost Pool = $900,000.

This means that for the actual level of machine hours, the unit variable cost pool is $2,000,000, and for the actual number of setups, the batch-level cost pool is $900,000.