Brothern Corporation Manufactures and Sells a Single Product

question 182

Multiple Choice

Brothern Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 6,800 units, but its actual level of activity was 6,820 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May:

Data used in budgeting:
Actual results for May:
-The net operating income in the planning budget for May would be closest to:

• A)$22,149
• B)$22,279
• C)$24,204
• D)$23,960

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Definitions:

Conceptual Framework

The conceptual framework in accounting is a system of interrelated objectives and fundamentals that provides the foundation for financial accounting and reporting standards.

General Purpose Financial Statements

Financial reports intended to meet the needs of various users who are not in a position to demand custom reports tailored to their information needs.

Special Purpose Financial Statements

Financial statements designed to meet specific needs of users that are not addressed by standard financial statements, often required by contractual or regulatory requirements.

Economic Benefits

The advantages or gains that an organization receives or expects to receive from its business activities.