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Andrei [34K]
3 years ago
13

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

nd performance reports. During November, the company budgeted for 7,900 units, but its actual level of activity was 7,920 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting: Fixed element per month Variable element per unit Revenue − $ 46.1 Direct labor $ 0 $ 11.8 Direct materials 0 18.5 Manufacturing overhead 42,600 3.6 Selling and administrative expenses 23,150 2.2 Total expenses $ 65,750 $ 36.1 Actual results for November: Revenue $ 363,782 Direct labor $ 93,926 Direct materials $ 146,050 Manufacturing overhead $ 69,102 Selling and administrative expenses $ 40,434 The direct materials cost in the flexible budget for November would be closest to
Business
1 answer:
aleksandrvk [35]3 years ago
5 0

Answer:

Amount in flexible budget of cost of direct material for the month of November shall be $93,456

Explanation:

Flexible budget is the budget prepared based on actual level of output, in relation to standard cost as estimated.

Here, for the month of November

Actual activity = 7,920 units

Standard material cost = $11.80 per unit

Amount in flexible budget based on actual quantity of output shall be

7,920 \times $11.80 = $93,456

Actual cost = $93,926

Therefore, amount in flexible budget of cost of direct material for the month of November shall be $93,456

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