Pickrel 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. Fixed Element per Month Variable Element per Well ServicedRevenue $5,500Employee salaries and wages$53,700 $1,300Servicing materials $600Other expenses$34,400 When the company prepared its planning budget at the beginning of November, it assumed that 27 wells would have been serviced. However, 31 wells were actually serviced during November.The amount shown for "Employee salaries and wages" in the planning budget for November would have been closest to:
A. $88,800
B. $94,000
C. $93,400
D. $81,348
Answer: A
Business
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