Answer the Following Questions Using the Information Below

question 29

Multiple Choice

Answer the following questions using the information below:
Flify Manufacturing Inc., incurred total indirect manufacturing labor costs of $500,000. The company is labor intensive. Total labor hours during the period were 5,000. Using qualitative analysis, the manager and the management accountant determine that over the period the indirect manufacturing labor costs are mixed costs with only one cost driver-labor-hours. They separated the total indirect manufacturing labor costs into costs that are fixed ($110,000 based on 8,000 hours of labor) and costs that are variable ($390,000) based on the number of labor-hours used. The company has estimated 7,000 labor hours during the next period.
-What will be the total variable cost for the estimated 7,000 hours?

• A) $341,250
• B) $546,000
• C) $700,000
• D) $437,500

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Definitions:

DineEquity

A company known for owning and operating restaurant brands, including Applebee's and IHOP.

Data

Facts and statistics collected together for reference or analysis, used to make decisions or solve problems.

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Data that has been processed, organized, or presented in a way that gives it meaning or context.

Media Richness

The capacity of a communication medium to effectively convey complex information in a timely manner.