Reference no: EM132474324

Skelton Corporation had planned to produce 50,000 units of product during the first quarter of the current year. The company prepared the following budget on May 1:

Budgeted (50,000 units)

Variable costs:

Direct materials used$36,000

Direct labor 45,000

Variable overhead 22,500

Fixed costs:

Manufacturing overhead 58,500

Total manufacturing costs$162,000

1. During the first quarter, Skelton produced 60,000 units and incurred total manufacturing costs of $184,000.

Question 1: A performance report for Skelton's first quarter of operations using a flexible budget approach would show:

Multiple Choice

Actual costs over budget by $11,700.
Total costs per the flexible budget of $194,400.
Actual costs over budget by $15,150.
Actual costs over budget by $1,300.