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:

Radial

Radial refers to structures or patterns that radiate outward from a central point, common in biological forms and in the arrangement of bones or muscles in limbs.

Axillary

Relating to the region under the arm.

Dorsal Root Ganglion

involves clusters of sensory neurons located near the spinal cord that transmit sensory information to the central nervous system.

Central Canal

The cerebrospinal fluid-filled space running longitudinally through the length of the entire spinal cord.