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Martinez Company produces pastries for resale at local restaurants. The master budget indicates that the company expects to use 5 pounds of direct materials for each unit produced at a cost of $10.00 per pound (one unit = one batch of pastries). Each unit produced will require 0.60 direct labor hours at a cost of $24.00 per hour. Variable manufacturing overhead is applied based on direct labor hours at a rate of $4.80 per hour. Expected sales last year totaled 80,000 units. Actual sales last year totaled 90,000 units.
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