Prater Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During February, the company budgeted for 5, 400 units, but its actual level of activity was 5, 380 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting: Actual results for February: The direct labor in the planning budget for February would be closest to:
A)$17, 754
B)$17, 820
C)$18, 164
D)$18, 232

Question

Prater Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During February, the company budgeted for 5, 400 units, but its actual level of activity was 5, 380 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting:  Actual results for February:  The direct labor in the planning budget for February would be closest to:
A)$17, 754 
B)$17, 820 
C)$18, 164 
D)$18, 232

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $0 + ($3.30 × 5, 400)= $17, 820

Prater Corporation Manufactures and Sells a Single Product