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.How much would total costs be on a flexible budget for the period based on actual sales?
A)$111,070
B)$119,400
C)$124,872
D)$128,355

Question

Quizplus · Accepted Answer

To calculate the flexible budget, we need to adjust the budgeted costs based on the actual number of units sold. Since Delaware Corp. planned to sell 4,000 units but actually sold 4,300 units, we'll need to adjust the budgeted costs for the additional 300 units.

Here's how to calculate the flexible budget:

Direct materials:
$21,360 ÷ 4,000 units = $5.34 per unit
$5.34 per unit × 4,300 units = $22,962

Direct labor:
$33,600 ÷ 4,000 units = $8.40 per unit
$8.40 per unit × 4,300 units = $36,120

Variable overhead:
$18,000 ÷ 4,000 units = $4.50 per unit
$4.50 per unit × 4,300 units = $19,350

Fixed overhead stays the same at $46,440.

Total flexible budget cost = $22,962 + $36,120 + $19,350 + $46,440 = $124,872

Therefore, the best choice is (C).