Violetta Inc.in the US manufactures plastic storage boxes.Management has determined that each medium-sized box has a standard materials cost of $1.20 when 4 pounds of raw material at a cost of $.30 per pound are used.The static budget for the month of March showed an estimated production of 15 000 boxes in March.During March,17 000 boxes were actually produced.The actual cost for each box was $1.56 when 3.9 pounds of raw material at a cost of $.40 per pound were purchased and used.What should be the total direct materials cost according to Violetta's flexible budget for March?

Question

Quizplus · Accepted Answer

The flexible budget should be based on the actual production level of 17,000 boxes. The standard cost per box is $1.20, so the total direct materials cost according to the flexible budget is 17,000 boxes x $1.20 = $20,400.