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LivingWell manufactures bicycles it plans to sell for $800 each. The bicycles require 10 lbs of aluminum each (which is the only direct material), and
LivingWell manufactures bicycles it plans to sell for $800 each. The bicycles require 10 lbs of aluminum each (which is the only direct material), and LivingWell budgets to purchase each pound of aluminum for $10/lb. The bicycles require 2 hours of labor, which LivingWell believes it will acquire for $25/hour. The company plans to sell 50,000 bicycles this year. Actual performance was a bit different than planned. LivingWell actually ended up selling 45,000 bicycles for $600 each. Additionally, the company actually spent a total of $5,000,000 in direct materials for 500,000 pounds of aluminum. LivingWell actually spent $2,050,000 on direct labor, and LivingWell had to pay $24/hour. What amount will be on LivingWell's Flex Budget as total direct materials cost
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