Davis Corporation has developed the following flexible budget formula for monthly overhead: For output of less than 200,000 units: $36,600 + $.80(units) For output of 200,000 units or more: $43,000 + $.80(units) How much overhead should Davis expect if the firm plans to produce 200,000 units?
a. $52,600
b. $59,000
c. $196,600
d. $203,000
D
$43,000 + $0.80(200,000) = $43,000 + $160,000 = $203,000
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