Diskind Corporation manufactures and sells a single product. The company uses un
ID: 2578829 • Letter: D
Question
Diskind Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 6,000 units, but its actual level of activity was 5,950 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October:
Data used in budgeting:
$54,800
$19.80
Actual results for October:
The direct labor in the planning budget for October would be closest to:
a. $33,000
b. $32,970
c. $32,500
d. $32,725
Diskind Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 6,000 units, but its actual level of activity was 5,950 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October:
Explanation / Answer
ANSWER IS -A. 33000
DIRECT LABOR IN PLANNING BUDGET = DIRECT LABOR PER UNIT * 6000 UNITS (PLANNED UNITS)
5.5 * 6000
= 33000
DIRECT LABOR IN FLEXIBLE BUDGET = DIRECT LABOR PER UNIT * ACTUAL UNITS PRODUCED
= 5.5 * 5950
= 32725