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A Company's Planned Activity Level for Next Year Is Expected

Question 84

Multiple Choice

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  Fixed  Indirect materials $90,000 Depreciation $37,500 Indirect labor 120,000 Taxes 7,500 Factory supplies 15,000 Supervision 30,000\begin{array}{lrlr}\text { Variable }&&\text { Fixed }\\\hline \text { Indirect materials } & \$ 90,000 & \text { Depreciation } & \$ 37,500 \\\text { Indirect labor } & 120,000 & \text { Taxes } & 7,500 \\\text { Factory supplies } & 15,000 & \text { Supervision } & 30,000\end{array} A flexible budget prepared at the 90,000 machine hours level of activity would show total manufacturing overhead costs of


A) $202,500.
B) $270,000.
C) $277,500.
D) $225,000.

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