Hairston Corporation manufactures and sells a single product. The company uses u
ID: 2391969 • Letter: H
Question
Hairston Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During November, the company budgeted for 7,740 units, but its actual level of activity was 7,760 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for November Data used in budgeting: Varlable Fixed element per month element per unit Revenue Direct labor Direct materials Manufacturing overhead Selling and administrative expenses Total expenses 39.70 o 8.60 16.90 2.00 0.60 0 44,200 20,800 $ 65,000 28.10 Actual results for November: Revenue Direct labor Direct materials Manufacturing overhead Selling and administrative expenses $ 306,902 $67126 $ 130,754 $57,790o $25,396 The selling and administrative expenses in the planning budget for November would be closest to: O $25.448 O $24,408Explanation / Answer
The selling and administrative expense in the planning budget =
= Fixed Element + Total Variable Element
= $ 20,800 + ( $ 0.60 * 7,740 Units)
= $ 25,444
Hence the correct answer is $ 25,444
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