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

question 91

Multiple Choice

A company's planned activity level for next year is expected to be 100000 machine hours.At this level of activity the company budgeted the following manufacturing overhead costs: \begin{array}{l}\begin{array}{lr}\quad\quad\quad\text { Variable }\\ \hline \text { Indirect materials } & \$ 120,000 \\\text { Indirect labor } &160,000 \\\text { Factory supplies } & 20,000\end{array}\\begin{array}{l}\quad\quad\quad\quad\text { Fixed }\\\hline \text { Depreciation } & \$ 50,000 \\\text { Taxes } & 10,000 \\\text { Supervision } & 40,000\end{array}\end{array} A flexible budget prepared at the 90000 machine hours level of activity would show total manufacturing overhead costs of

• A)$270000.
• B)$360000.
• C)$370000.
• D)$300000.

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Definitions:

Overconfidence Bias

A cognitive bias which leads an individual to overestimate their knowledge, abilities, or control over situations.

Selection Bias

A type of bias caused by choosing non-random data for statistical analysis, which can cause the results to not be representative of the whole population.

Deductive Reasoning

A rational procedure in which an inference is derived from the harmony of multiple statements thought to be valid.

Deductive Reasoning

A reasoning strategy where a judgment is drawn from the alignment of various propositions typically considered factual.