Question

Danielle 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 8,200 units, but its actual level of activity was 8,250 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 $34.20
Direct labor $0 $6.20
Direct materials 0 13.80
Manufacturing overhead 37,000 1.70
Total expenses $62,500 $21.90
Selling and administrative expenses 25,500 0.20
Actual results for May:
Revenue $228,900
Direct labor $41,130
Direct materials $93,235
Manufacturing overhead $43,500
Selling and administrative expenses $30,470
The direct materials in the flexible budget for May would be closest to:________.
a. $89,735.
b. $92,230.
c. $90,420.
d. $91,020.

Answer 1

$113,850

Step-by-step explanation:

The computation of the direct material in the flexible budget is shown below:

= Actual level of activity × direct material per unit

= 8,250 units × $13.80

= $113,850

By multiplying the actual level of activity with the direct material per unit we can get the direct material in the flexible budget and the same is shown above

This is the answer but the same is not provided in the given options