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Question - At the beginning of the year, Smith Inc. budgeted the following:
Units 8,000
Sales $100,000 Minus
Total variable expenses 60,000
Total fixed expenses 20,000
Net income $20,000
Factory Overhead
Variable $30,000
Fixed 10,000
There were no beginning inventories. At the end of the year, no work was in process, total actual factory overhead incurred was $37,500 versus the $40,000 estimated. Total applied overhead for the year was $39,000 and it was applied on the basis of budgeted unit production. Factory overhead was applied on the basis of budgeted unit production. How many units were produced this year?
A. 7,200
B. 8,000
C. 7,800
D. 7,500
Describe the circumstances and Evaluate the computations and explain their meanings - supported by well-thought-out rationale and considering various factors
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