Camden Products Inc.manufacturers travel accessories.The company's controller has prepared the following static budget of one of the product lines for the month of November:
$\begin{array}{lr}
\text { Estimated production } & \text {1000 units }\
\text { Direct labour per unit } & \text {12 minutes }\
\text {Direct labour required for estimated production } & \text { 200 hours}\
\text { Average direct labour rate per hour } &\$9\
\text {Estimated direct labour cost } &\$1800\
\end{array}$

Actual production during November was 1 300 units and actual direct labour cost was $2520.
If Camden prepares a flexible budget for November,direct labour cost is estimated to be:

Question

Camden Products Inc.manufacturers travel accessories.The company's controller has prepared the following static budget of one of the product lines for the month of November:
$\begin{array}{lr}
  \text { Estimated production } & \text {1000 units  }\
 \text { Direct labour per unit } & \text {12 minutes  }\
 \text {Direct labour required for estimated production  } & \text {  200 hours}\
 \text { Average direct labour rate per hour } &\$9\
 \text {Estimated direct labour cost  } &\$1800\
\end{array}$
 
Actual production during November was 1 300 units and actual direct labour cost was $2520.
If Camden prepares a flexible budget for November,direct labour cost is estimated to be:

Quizplus · Accepted Answer

To prepare a flexible budget, we need to calculate the costs based on the actual production level of 1,300 units. From the static budget, we know that direct labor cost is estimated at $1.50 per unit. So for 1,300 units, the direct labor cost in the flexible budget would be:
$1.50 x 1,300 units = $1,950
Therefore, the closest option to this estimate is C) $2,340. All other options are either too high or too low based on the calculation above.

Camden Products Inc Actual Production During November Was 1 300 Units and Actual