Delaware Corp.prepared a master budget that included $21,360 for direct materials,$33,600 for direct labor,$18,000 for variable overhead,and $46,440 for fixed overhead.Delaware Corp.planned to sell 4,000 units during the period,but actually sold 4,300 units.What would Delaware's total costs be if it used a flexible budget for the period based on actual sales?
A)$111,070
B)$119,400
C)$124,872
D)$128,355

Question

Quizplus · Accepted Answer

First, we need to calculate the variable cost per unit based on the master budget:
Direct materials + Direct labor + Variable overhead / Planned units
= $21,360 + $33,600 + $18,000 / 4,000
= $18.99

Using the variable cost per unit, we can calculate the flexible budget for 4,300 units:
Direct materials: $18.99 x 4,300 = $81,557
Direct labor: $18.99 x 4,300 = $81,557
Variable overhead: $18.99 x 4,300 = $81,557
Fixed overhead: $46,440
Total costs = $81,557 + $81,557 + $81,557 + $46,440 = $291,111

Therefore, the answer is C.