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vovikov84 [41]
3 years ago
5

The master budget of Marigold Corp. shows that the planned activity level for next year is expected to be 50000 machine hours. A

t this level of activity, the following manufacturing overhead costs are expected:
Indirect labor $800000
Machine supplies 250000
Indirect materials 250000
Depreciation on factory building 70000
Total manufacturing overhead $1370000
A flexible budget for a level of activity of 60000 machine hours would show total manufacturing overhead costs of :_________.
a. $1630000
b. $1370000.
c. $1644000.
d. $1574000.
Business
1 answer:
Reptile [31]3 years ago
7 0

Answer:

The correct answer is A.

Explanation:

<u>First, we need to separate the fixed costs and calculate the unitary variable costs:</u>

<u></u>

Fixed costs:

Depreciation on factory building= 70,000

Total unitary varaible cost:

Total cost= 800,000 + 250,000 + 250,000= $1,300,000

Unitary cost per hour= 1,300,000 / 50,000= $26

<u>Now, the total cost for 60,000 hours:</u>

Total cost= 26*60,000 + 70,000

Total cost= $1,630,000

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