Lampert Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 6,100 units, but its actual level of activity was 6,060 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for March:
-The manufacturing overhead in the flexible budget for March would be closest to:
A) $48,822
B) $51,384
C) $51,440
D) $49,468

Question

Lampert Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 6,100 units, but its actual level of activity was 6,060 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for March: 
-The manufacturing overhead in the flexible budget for March would be closest to:
A) $48,822 
B) $51,384 
C) $51,440 
D) $49,468

Quizplus · Accepted Answer

The formula for calculating manufacturing overhead in flexible budget is:

Manufacturing Overhead = Variable Overhead Rate * Actual Activity + Fixed Overhead

Using the given data:

Variable overhead rate = $3.15 per unit

Actual activity = 6,060 units

Fixed overhead = $32,469

Therefore, Manufacturing overhead in the flexible budget for March = ($3.15 x 6,060) + $32,469 = $51,384.

Hence, the closest answer is B) $51,384.

Lampert Corporation Manufactures and Sells a Single Product