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kvasek [131]
3 years ago
11

The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted f

or 5,100 units, but its actual level of activity was 5,090 units. The company has provided the following data concerning the formulas to be used in its budgeting:
Fixed element per month Variable element per tenant-day
Revenue $39.20
Direcr Labor $0 $5.40
Direct Materials $0 13.20
Manufacturing Overhead $45,800 1.70
Selling and Administrative Expenses $22,800 0.50
Total Expenses $68,600.00 $20.80The direct materials in the flexible budget for October would be closest to:
Business
1 answer:
Pavlova-9 [17]3 years ago
8 0

Answer:

Direct material= $67,188

Explanation:

Giving the following information:

During October, the company budgeted for 5,100 units, but its actual level of activity was 5,090 units. The company has provided the following data concerning the formulas to be used in its budgeting:

Direct Materials $13.20

Direct material= 5,090*13.20= $67,188

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Forrester Company is considering buying new equipment that would increase monthly fixed costs from $276,000 to $544,500 and would decrease the current variable costs of $60 by $15 per unit. The selling price of $100 is not expected to change.

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