Kekiwi Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During January, the company budgeted for 6,900 units, but its actual level of activity was 6,910 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting:
Actual results for January:
The manufacturing overhead in the flexible budget for January would be closest to:
A) $57,004
B) $57,647
C) $57,630
D) $57,170

Question

Kekiwi Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During January, the company budgeted for 6,900 units, but its actual level of activity was 6,910 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting:
 Actual results for January:
 The manufacturing overhead in the flexible budget for January would be closest to:
A) $57,004 
B) $57,647 
C) $57,630 
D) $57,170

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $45,900 + ($1.70 × 6,910) = $57,647

Kekiwi Corporation Manufactures and Sells a Single Product