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Hallet Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May,

Hallet Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 5,800 units, but its actual level of activity was 5,830 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May:

Data used in budgeting:

Fixed element per month Variable element per unit
Revenue - $ 32.30
Direct labor $ 0 $ 3.40
Direct materials 0 10.40
Manufacturing overhead 46,700 1.10
Selling and administrative expenses 26,200 0.80
Total expenses $ 72,900 $ 15.70

Actual results for May:

Revenue $ 191,229
Direct labor $ 19,872
Direct materials $ 60,622
Manufacturing overhead $ 50,523
Selling and administrative expenses $ 30,654

The net operating income in the planning budget for May would be closest to:

Multiple Choice

  • $23,878

  • $23,380

  • $29,406

  • $29,711

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