Question
Prater Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During February,
Prater Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During February, the company budgeted for 5,400 units, but its actual level of activity was 5,380 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting:
| Revenue | $31.10 | |
| Direct Labor | $0.00 | $3.30 |
| Direct Materials | $0.00 | $9.00 |
| Manufacturing Overhead | $44,600.00 | $1.80 |
| Selling and Administrative expenses | $26,700.00 | $0.10 |
| Total Expenses | $71,300.00 | $14.20 |
| Actual Results for February: | ||
| Revenue | $169,648.00 | |
| Direct Labor | $18,164.00 | |
| Direct Materials | $50,810.00 | |
| Manufacturing Overhead | $53,734.00 | |
| Selling and Administrative Expenses | $28,278.00 |
|
The direct labor in the planning budget for February would be closest to: A. $17,754 B. $17,820 C. $18,164 D. $18,232
The manufacturing overhead in the flexible budget for February would be closest to: A. $53,934 B. $54,284 C. $54,320 D. $53,535
The net operating income in the flexible budget for February would be closest to: A. $19,960 B. $18,593 C. $18,731 D. $19,622
Please offer explanation and show work! I appreciate it
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Principles Of Auditing And Other Assurance Services
Authors: Ray Whittington, Kurt Pany
13th Edition
007232726X, 9780072327267
