Herard Corporation Manufactures and Sells a Single Product

question 205

Multiple Choice

Herard Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 7,900 units, but its actual level of activity was 7,890 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for March:

Data used in budgeting:
Actual results for March:
-The direct materials in the flexible budget for March would be closest to:

• A)$117,847
• B)$119,928
• C)$117,549
• D)$120,080

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Definitions:

Administrative Department

A segment within an organization responsible for managing general operations and administrative tasks.

Profit Center

A segment or department within a business that is responsible for generating its own revenue and profits.

Revenue Center

A division or unit within an organization responsible for generating revenue through its operations and activities.

Gross Profit

The financial metric that represents the difference between revenue and the cost of goods sold before accounting for other expenses.