Sathre Corporation Is an Oil Well Service Company That Measures

Multiple Choice

Sathre 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. When the company prepared its planning budget at the beginning of December, it assumed that 34 wells would have been serviced. However, 32 wells were actually serviced during December.The "Employee salaries and wages" in the flexible budget for December would have been closest to:

A) $87,000
B) $84,600
C) $85,200
D) $89,888