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

question 23

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 materials?

• A)$1,000,000
• B)$350,000
• C)$140,000
• D)$875,000
• E)None of the answer choices is correct.

---

Definitions:

Real Domestic Output

The value of all goods and services produced within a country's borders in a given time period, adjusted for inflation.

Labor Force

The total number of people employed or actively seeking employment in a given economy.

High-Paying Occupations

Jobs that offer salaries significantly above the median income level for workers, often requiring specialized skills or education.

Minority Workers

Workers who belong to a racial, ethnic, or socio-cultural minority group within the broader workforce.