Neubert 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 5,300 units, but its actual level of activity was 5,340 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting:
Actual results for December:
The manufacturing overhead in the flexible budget for December would be closest to:
A) $41,350
B) $40,733
C) $41,250
D) $41,310

Question

Neubert 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 5,300 units, but its actual level of activity was 5,340 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting:
 Actual results for December:
 The manufacturing overhead in the flexible budget for December would be closest to:
A) $41,350 
B) $40,733 
C) $41,250 
D) $41,310

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $33,300 + ($1.50 × 5,340) = $41,310

Neubert Corporation Manufactures and Sells a Single Product