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Zina [86]
3 years ago
14

Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets

and performance reports. During May, the company budgeted for 7,300 units, but its actual level of activity was 7,250 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: Fixed element per month Variable element per unit Revenue - $ 34.80 Direct labor $ 0 $ 6.80 Direct materials 0 13.30 Manufacturing overhead 30,000 2.30 Selling and administrative expenses 26,100 0.80 Total expenses $ 56,100 $ 23.20 Actual results for May: Revenue $ 253,600 Direct labor $ 48,970 Direct materials $ 98,250 Manufacturing overhead $ 46,500 Selling and administrative expenses $ 30,530 The direct labor in the planning budget for May would be closest to:
Business
1 answer:
nadya68 [22]3 years ago
6 0

Answer:

$ 49,640

Explanation:

The question is asking for PLANNING BUDGET

Planning Budget does not in anyway mean flexible budget.

So the quantity of units for Planning Budget would be what the company budgeted that is 7,300 units

The next step in the solution to the question will be to know the cost per unit. For Direct Labor the price given is $ 6.80 per unit

Total Direct Labor for May in the planning budget would be 7,300 X 6.80 = $ 49,640

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