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Stegemann Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates for operations in May:

\begin{tabular}{llcr}
& \begin{tabular}{c}
Fixed \\
Element per \\
Month
\end{tabular} & \begin{tabular}{c}
Variable \\
Element per \\
Container \\
Refurbished
\end{tabular} & \begin{tabular}{c}
Actual Total \\
for May
\end{tabular} \\
Revenue & & [tex]$\$[/tex] 5,300[tex]$ & $[/tex]\[tex]$ 156,400$[/tex] \\
Employee salaries and wages & [tex]$\$[/tex] 42,900[tex]$ & $[/tex]\[tex]$ 1,300$[/tex] & [tex]$\$[/tex] 82,300[tex]$ \\
Refurbishing materials & & $[/tex]\[tex]$ 500$[/tex] & [tex]$\$[/tex] 15,100[tex]$ \\
Other expenses & $[/tex]\[tex]$ 42,900$[/tex] & & [tex]$\$[/tex] 41,900[tex]$
\end{tabular}

When the company prepared its planning budget at the beginning of May, it assumed that 27 containers would have been refurbished. However, 29 containers were actually refurbished during May.

The amount shown for "Other expenses" in the planning budget for May would have been closest to:

A. $[/tex]\[tex]$ 42,900$[/tex]
B. [tex]$\$[/tex] 42,400[tex]$
C. $[/tex]\[tex]$ 41,900$[/tex]
D. [tex]$\$[/tex] 39,010$



Answer :

GinnyAnswer
To solve for the "Other expenses" in the planning budget for May, let's break down the given information step-by-step:

1. Identify Fixed and Variable Elements:
- For "Other expenses," we have:
- Fixed element per month: \[tex]$42,900 - There is no variable element given per container refurbished for "Other expenses." 2. Determine the Planned Number of Containers Refurbished: - The company planned to refurbish 27 containers at the beginning of May. 3. Calculate the Total "Other expenses" for the Planning Budget: - Since "Other expenses" only has a fixed component and no variable component, the total for the planning budget remains constant regardless of the number of containers planned for refurbishment. - Therefore, the total "Other expenses" for the planning budget is simply the fixed amount of \$[/tex]42,900.

Thus, the amount shown for "Other expenses" in the planning budget for May would have been closest to \[tex]$42,900. So the correct choice from the multiple options given is: \$[/tex]42,900

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