Question
Milo Clothing Company produces mens ties since 1995. In order to reasonably plan and closely control their manufacturing costs, they use the budgeting system. The
Milo Clothing Company produces mens ties since 1995. In order to reasonably plan and closely control their manufacturing costs, they use the budgeting system. The following budgeted and actual amounts are released to top management for 2020 and they asked you, a cost accountant, to prepare a performance budget report so that they can analyze all type of variances including both favourable and unfavourable.
Cost | Budget at 4,000 Units | Actual Amounts at 4,500 Units |
Direct materials | $185,000 | $188,000 |
Direct labour | 226,000 | 250,000 |
Equipment depreciation | 6,000 | 6,000 |
Indirect labour | 22,000 | 25,000 |
Indirect materials | 14,000 | 16,000 |
Rent and insurance | 35,000 | 35,000 |
Prepare a flexible budget report for Milo Clothing Company for the year and then answer the following question:
What is the Flexible Budget for Indirect Labour?
Select one:
a. $44,120
b. $24,750
c. $12,230
d. $34,335
Clear my choice
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