Reference no: EM131694126

Question - US company Mary's Fine Fashions manufactures and sells various types of women's clothing. At the end of 2008, Mary had estimated for the production and sale of 25 000 short-sleeve shirts.

Each shirt has a standard calling for 2.5 yards of direct material at a standard cost of $1.25 per yard and 12 minutes of direct labour time at a standard cost of $.20 per minute.

During 2009, the company actually produced and sold 23 000 shirts. These 23 000 shirts had an actual direct materials cost of $77 142 (59 340 yards at $1.30 per yard) and an actual direct labour cost of $63 250 (253 000 minutes at $.25 per minute).

Each shirt sells for $20.

What is Mary's net income (loss) based on a flexible budget?

$361 875

$307 400

$347 400

$332 925