Question

Dure Corporation's cost formula for its selling and administrative expense is $24,500 per month plus $1 per unit. For the month of July, the company planned for activity of 7,200 units, but the actual level of activity was 7,160 units. The actual selling and administrative expense for the month was $31,460. The selling and administrative expense in the flexible budget for July would be closest to: Multiple Choice $31,524 $31,460 $31,660 $31,700

Answer 1

Answer:

The correct answer is C.

Explanation:

Giving the following information:

Dure Corporation's cost formula for its selling and administrative expense is $24,500 per month plus $1 per unit. For July, the company planned for activity of 7,200 units, but the actual level of activity was 7,160 units.

Fixed costs= 24,500

Variable cost= $1 per unit

We need to calculate the total cost for July.

Total cost= 24,500 + 1*x

x= number of units

Total cost= 24,500 + 7,160*1= $31,660