Dure Corporation's Cost Formula for Its Selling and Administrative Expense

question 164

Multiple Choice

Dure Corporation's cost formula for its selling and administrative expense is $24,500 per month plus $1 per unit. For the month of July, the company planned for activity of 7,200 units, but the actual level of activity was 7,160 units. The actual selling and administrative expense for the month was $31,460.
-The selling and administrative expense in the planning budget for July would be closest to:

• A) $31,460
• B) $31,660
• C) $31,700
• D) $31,636

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Definitions:

Direct Method

A methodology applied in cash flow statements to present major classes of gross cash receipts and payments, offering a clear view of cash flow from operating activities.

Current Asset

Assets that are expected to be converted into cash, sold, or consumed within one year or a business cycle, whichever is longer.

Current Liability

A company's debts or obligations that are due within one year or within the normal operating cycle.

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.