Illescas Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During December, the company budgeted for 6,400 units, but its actual level of activity was 6,440 units. The company has provided the following data concerning the formulas to be used in its budgeting:

-The direct labor in the planning budget for December would be closest to:
A)$40,412
B)$40,572
C)$40,161
D)$40,320

Question

Illescas Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During December, the company budgeted for 6,400 units, but its actual level of activity was 6,440 units. The company has provided the following data concerning the formulas to be used in its budgeting:

-The direct labor in the planning budget for December would be closest to:

-The direct labor in the planning budget for December would be closest to:
A)$40,412 
B)$40,572 
C)$40,161 
D)$40,320

Quizplus · Accepted Answer

The direct labor in the planning budget is calculated based on the expected level of activity and the standard labor rate. Without specific details on the expected level of activity or labor rate, option D is the closest estimate.

Illescas Corporation Manufactures and Sells a Single Product