Delaware Corp

Business May 21, 2021

Delaware Corp. prepared a master budget that included $21,360 for direct materials, $33,600 for direct labor, $18,000 for variable overhead, and $46,440 for fixed overhead. Delaware Corp. planned to sell 4,000 units during the period, but actually sold 4,300 units. What would Delaware's direct labor cost be if it used a flexible budget for the period based on actual sales? A) $14,448 B) $31,256 C) $33,600 D) $36,120

Expert Solution

Answer

D )

Explanation

Computation of Direct Labor Cost for Actual Sales as per Flexible Budget:

Direct Labor Cost for Actual Sales = Direct Labor Cost as per Master Budget/Units Planned to be Sold as per Master Budget * Actual Units Sold

=$33,600 / 4,000 units * 4,300 units

= $36,120

So, Direct Labor Cost for Actual Sales as per Flexible Budget is $36,120.

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