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Diskind Corporation: calculate direct labor budget for a month

Question

Diskind Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 7,100 units, but its actual level of activity was 7,050 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October:


Data used in budgeting:

 

Fixed
element
per month

Variable
element per tenant-day

Revenue

$34.60

     

Direct labor

$0

$6.60

Direct materials

0

13.10

Manufacturing overhead

41,000

2.10

Selling and administrative expenses

25,900

0.60

Total expenses

$66,900

$22.40

 

Actual results for October:

Revenue

$244,930

   

Direct labor

$46,320

Direct materials

$93,535

Manufacturing overhead

$45,500

Selling and administrative expenses

$30,510


The direct labor in the planning budget for October would be closest to:

 

a. $46,320

b. $46,530

c. $46,830

d. $46,860

 

 

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