Manter Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,900 units, but its actual level of activity was 6,940 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting:
Actual results for June:
The selling and administrative expenses in the planning budget for June would be closest to:
A) $29,716
B) $28,530
C) $29,888
D) $28,558

Question

Manter Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,900 units, but its actual level of activity was 6,940 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting:
 Actual results for June:
 The selling and administrative expenses in the planning budget for June would be closest to:
A) $29,716 
B) $28,530 
C) $29,888 
D) $28,558

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $23,700 + ($0.70 × 6,900) = $28,530

Manter Corporation Manufactures and Sells a Single Product