
Bugos Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes.

 Fixed Element per MonthVariable Element per Customer ServedRevenue
 
$ 4,200

Employee salaries and wages

$ 58,800

$ 900

Travel expenses
 
$ 700

Other expenses

$ 33,300
 
When the company prepared its planning budget at the beginning of March, it assumed that 40 customers would have been served.

The amount shown for “Employee salaries and wages” in the planning budget for March would have been closest to:

Multiple Choice

$91,200

$94,800

$92,600

$102,889




To calculate the total "Employee salaries and wages" in the planning budget for March, we need to account for both the **fixed element** and the **variable element** per customer served.

### Given Data:
- **Fixed salaries and wages per month** = $58,800
- **Variable salaries and wages per customer served** = $900
- **Assumed customers served in March** = 40

### Step 1: Calculate the total variable cost for 40 customers:
\[
\text{Variable cost for salaries and wages} = 900 \times 40 = 36,000
\]

### Step 2: Calculate the total "Employee salaries and wages" in the planning budget:
\[
\text{Total Employee salaries and wages} = \text{Fixed salaries and wages} + \text{Variable cost}
\]
\[
= 58,800 + 36,000 = 94,800
\]

Thus, the amount shown for "Employee salaries and wages" in the planning budget for March would have been closest to **$94,800**.

### Final Answer:
**$94,800**

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Would you like further clarification or additional details on this problem?

Here are 5 related questions to explore further:
1. How do fixed and variable costs impact a company's budgeting process?
2. What methods can companies use to control variable costs?
3. How would Bugos Corporation adjust their planning if they expected more or fewer customers?
4. What role does cost-volume-profit (CVP) analysis play in budgeting decisions?
5. How does forecasting customer demand affect financial planning for a service company?

**Tip**: Always double-check your assumptions in planning budgets, especially variable elements, as they directly depend on actual output!

Bugos Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed Element per Month: $58,800 (Employee salaries and wages), $4,200 (Travel expenses), $33,300 (Other expenses). Variable Element per Customer Served: $900 (Employee salaries and wages), $700 (Travel expenses). When the company prepared its planning budget at the beginning of March, it assumed that 40 customers would have been served. The amount shown for 'Employee salaries and wages' in the planning budget for March would have been closest to: Multiple Choice: $91,200, $94,800, $92,600, $102,889.

Learn how to calculate 'Employee salaries and wages' in the planning budget for Bugos Corporation in March, with fixed salaries of $58,800 and variable costs per customer of $900. Assumed 40 customers for March. Step-by-step solution provided. Suitable for students in Grades 10-12.

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