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

---

Definitions:

Plaque

A deposit of fatty and other substances that builds up in the inner lining of arteries, leading to atherosclerosis and potential blockage.

Waxed Floss

Dental floss coated with wax to facilitate easier sliding between teeth for the removal of plaque and food particles.

Head Lice

Parasitic insects that live on the human scalp and feed on blood, causing itching and discomfort; commonly spread by close personal contact.

Pediculosis Capitis

A common infestation of the scalp by head lice, leading to itching and discomfort.