Exhibit 10-2 Benny's Bakery Produces Bagels for Resale at Local Grocery Stores.The

question 51

Multiple Choice

Exhibit 10-2
Benny's Bakery produces bagels for resale at local grocery stores.The master budget indicates that the company expects to use 2.5 pounds of direct materials for each unit produced at a cost of $10.00 per pound (one unit = one batch of bagels) .Each unit produced will require 0.30 direct labor hours at a cost of $24.00 per hour.Variable manufacturing overhead is applied based on direct labor hours at a rate of $4.80 per hour.Last year's sales were expected to total 40,000 units.Benny just received last year's actual results showing sales of 35,000 units.
-Refer to Exhibit 10-2.What amount would the flexible budget show for direct labor?

• A)$840,000
• B)$252,000
• C)$288,000
• D)$280,000
• E)None of the answer choices is correct.

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Definitions:

Laffer Curve

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indicates the average of the current prices of all goods and services in the economy at a specific time.

Money Supply

The aggregate of all funds accessible in an economy, counting cash, coins, and checking and savings account balances, at a certain time.

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