Question

# 16. A company's planned activity level for next year is expected to be 100,000 machine hours....

16. A company's planned activity level for next year is expected to be 100,000 machine

hours. At this level of activity, the company budgeted the following manufacturing overhead costs:

Variable Indirect materials Indirect labor Factory supplies

\$120,000 160,000 20,000

Fixed Depreciation Taxes Supervision

\$50,000 10,000

40,000

A flexible budget prepared at the 90,000 machine hours level of activity would show total manufacturing overhead costs of

A) \$270,000. B) \$360,000. C) \$370,000. D) \$300,000.

 Answer Sr No Particular Calculations a. Total Fixed Cost = \$50,000 + \$ 10,000 + \$40,000 = \$ 100000 b. Variable cost per unit = Total Variable cost/estimated machine hours = (\$120,000 + \$160,000 + \$20,000)/100000 = \$3 c. Total manufacturing overhead cost = Total Fixed Cost + Variable cost at the 90,000 machine hours level of activity = \$ 100000 + (\$3*90000) = \$ 100000 + \$ 270000 = \$ 370000 Please Like !!!

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