Illescas Corporation manufactures and sells a single product. The company uses units as the measure...
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Accounting
Illescas Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During December, the company budgeted for 6,400 units, but its actual level of activity was 6,440 units. The company has provided the following data concerning the formulas to be used in its budgeting:
Fixed element per month
Variable element per unit
Revenue
$32.50
Direct labor
$0
$6.30
Direct materials
0
8.70
Manufacturing overhead
48,600
1.70
Selling and administrative expenses
29,100
0.70
Total expenses
$77,700
$17.40
The direct labor in the planning budget for December would be closest to:
$40,412
$40,572
$40,161
$40,320
Please show your detailed work! Thanks.
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