Delaware Corp.prepared a master budget that included $21,360 for direct materials,$33,600 for direct labor,$18,000 for variable overhead,and $46,440 for fixed overhead.Delaware Corp.planned to sell 4,000 units during the period,but actually sold 4,300 units.What would Delaware's fixed overhead cost be if it used a flexible budget for the period based on actual sales?
A)$43,200
B)$46,440
C)$49,923
D)$166,410

Question

Quizplus · Accepted Answer

Fixed overhead costs remain constant regardless of the level of production or sales volume. Therefore, even if Delaware Corp. sold more units than planned, its fixed overhead cost would remain the same as budgeted, which is $46,440.