Managerial Accounting

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Creating an Operational Budget Plan for Remote Devices

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Trident Corp's master budget was based on a level of activity of producing and selling 40,000 remote control devices with a retail price of \$35 per unit. The company has the capacity to produce 50,000 units. Variable labor costs were budgeted to be \$350,000. Variable material costs were budgeted to be \$224,000 and variable overhead costs were budgeted to be \$364,000. Actual material costs incurred were \$261,000 on 46,000 units produced and sold.

What should the flexible budget material cost be under the new activity level?

A

$224,000

B

$285,000

C

$257,600

D

$300,000