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4 June, 13:47

gHenderson Ski Co. 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. Henderson planned to sell 2,000 units during the period, but actually sold 3,400 units. What would Henderson' total costs be if it used a flexible budget for the period based on actual sales?

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  1. 4 June, 17:35
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    Total cost = $170,472

    Explanation:

    Giving the following information:

    Direct material = $21,360

    Direct labor = $33,600

    Variable overhead = $18,000

    FIxed overhead = $46,440

    Henderson planned to sell 2,000 units during the period, but sold 3,400 units.

    First, we need to calculate the unitary variable cost:

    Unitary variable cost = total variable cost/number of units

    Unitary variable cost = (72,960/2,000) = $36.48

    Now, we can calculate the total cost for 3,400 units

    Total cost = total fixed cost + total variable cost

    Total cost = 46,440 + (36.48*3,400) = $170,472
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