Prater Corporation Manufactures and Sells a Single Product

question 356

Multiple Choice

Prater Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During February,the company budgeted for 5,400 units,but its actual level of activity was 5,380 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting: Actual results for February: The manufacturing overhead in the flexible budget for February would be closest to:

• A)$53,934
• B)$54,284
• C)$54,320
• D)$53,535

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Definitions:

Perpetual Inventory System

This accounting practice immediately logs the sale or acquisition of inventory via computerized point-of-sale systems and software for managing enterprise assets.

Accounts Payable

Short-term debts or obligations a company owes to its suppliers or creditors for goods and services received.

Sales Returns and Allowances

Deductions from a company's sales revenue that account for returned goods and discounts or allowances given to customers.

Purchase Discounts

Reductions in the purchase price of goods, services, or assets, usually offered as an incentive for prompt payment.