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Solution Library
Diskind Corporation: calculate direct labor budget for a month
Question
Diskind Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 7,100 units, but its actual level of activity was 7,050 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October:
Data used in budgeting:
|
Fixed |
Variable |
|
|
Revenue |
— |
$34.60 |
|
Direct labor |
$0 |
$6.60 |
|
Direct materials |
0 |
13.10 |
|
Manufacturing overhead |
41,000 |
2.10 |
|
Selling and administrative expenses |
25,900 |
0.60 |
|
Total expenses |
$66,900 |
$22.40 |
Actual results for October:
|
Revenue |
$244,930 |
|
Direct labor |
$46,320 |
|
Direct materials |
$93,535 |
|
Manufacturing overhead |
$45,500 |
|
Selling and administrative expenses |
$30,510 |
The direct labor in the planning budget for October would be closest to:
a. $46,320
b. $46,530
c. $46,830
d. $46,860
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