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Question 11
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[CLO-4] Nicolaysen 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 5,700 units, but its actual level of activity was 5,690 units. The company has provided the following data concerning the formulas used in its budgeting and actual
results for February.
Data used in budgeting
Fixed element per
Variable element per
month
unit
Revenue
$36.80
Direct labor
$0
$3.70
Direct materials
$0
17.80
Manufacturing overhead
30,500
1.20
Selling and administrative
expenses
26,800
0.30
Total expenses
$57,300
$23.00
Actual results for February
Revenue
$207,302
Direct labor
$21,093
Direct materials
$104,952
Manufacturing overhead
$37,888
Selling and administrative expenses
$29,787
The net operating income in the planning budget for February would be closest to:
$13,480
$21,198
$21,360
$13,558
$13,606
$13,412
$21,222