At the beginning of the year, smith, inc., budgeted the following: units: 10,000 sales: $100,000 total variable expenses: $ 60,000 total fixed expenses: $ 20,000 variable factory overhead $ 30,000 fixed factory overhead: $ 10,000 there were no beginning inventories. at the end of the year, no work was in process, total factory overhead incurred was $39,500, and underapplied factory overhead was $1,500. factory overhead was applied on the basis of budgeted unit production. how many units were produced this year?

Actual units produced: 9,500

Explanation:

actual units x overhead rate - actual factory overhead = underapplied

the underapplied overhead means the actual overhead was greater than applied overhead so we can build the formula as follow:

actual units x r - 39,500 = -1,500

We need to calculate the rate for overhead:

on the budget total overhead:

10,000 fixed + 30,000 variable = 50,000

and units are 10,000

so rate = 40,000 / 10,000 = 4

Now we return to the formula:

actual units x 4 - 39,500 = -1,500

actual units = (39,500 - 1,500 ) / 4

actual units = 38,000 / 4 = 9,500

answer; i believe the answer is 40,600,000;