Use the Information Below to Answer the Following Question(s)

question 114

Multiple Choice

Use the information below to answer the following question(s) .Raymaster is a small computer software company which uses the account analysis method and has hired you to perform some management advisory services.The company sold 2,500 high quality payroll programs last year.
-What is the predicted indirect manufacturing labour cost if 160 machine-hours are budgeted and 170 are actually worked, assuming the estimated cost function is y = $81.04 + 5.32x?

• A)$985.44
• B)$932.24
• C)$904.40
• D)$851.20
• E)$81.04

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Definitions:

Service Business

A type of business that primarily offers intangible products, such as work, expertise, or services, instead of physical goods.

Facility Costs

Expenses related to the physical buildings and property necessary for a company to conduct its business, including rent, utilities, and maintenance.

Overhead Cost Application

The process of distributing overhead costs to specific cost objects such as products, services, or departments based on a chosen allocation base.

Traditional Costing Systems

Costing methods that allocate manufacturing overhead costs to products based on a single measure of activity, such as direct labor hours.