Question

Delaware Corp. prepared a master budget that included $16,360 for direct materials, $28,100 for direct labor, $14,315 for variable overhead, and $38,900 for fixed overhead. Delaware Corp. planned to sell 4,090 units during the period, but actually sold 4,300 units. What would Delaware’s variable overhead cost be if it used a flexible budget for the period based on actual sales? (Do not round your intermediate calculations.)

Answer 1

$15,050

Step-by-step explanation:

The computation of the variable overhead cost in case of flexible budget is shown below:

= Actual sales units × Variable overhead at budgeted sales ÷ Budgeted sales units

= 4,300 units × $14,315 ÷ 4,090 units

= $15,050

We simply applied the above formula so that the variable overhead cost could come for flexible budget