Armstrong,Inc.uses a flexible budget.Armstrong produced 16,000 units in May incurring direct materials cost of $20,480.Its master budget for the year projected direct materials cost of $362,500,at a production volume of 290,000 units.A flexible budget for May should reflect direct materials cost of:

Question

Quizplus · Accepted Answer

The flexible budget for direct materials cost for May can be calculated by taking the master budget's projected direct materials cost and adjusting it for the actual production volume. The calculation is as follows: ($362,500 / 290,000 units) * 16,000 units = $20,000.