Barrick Company has established a flexible budget for manufacturing overhead based on direct labour-hours. Total...
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Accounting
Barrick Company has established a flexible budget for manufacturing overhead based on direct labour-hours. Total budgeted costs at 200,000 direct labour-hours are as follows:
| Variable costs (total): |
| Packing supplies | $120,000 |
| Indirect labour | $180,000 |
| Fixed costs (total): |
| Utilities | $100,000 |
| Rent | $ 40,000 |
| Insurance | $ 20,000 |
If Barrick Company plans to operate at 190,000 direct labour-hours during the next period, the flexible budget would show indirect labour costs of:
A.
$270,000
B.
$180,000
C.
$114,000
D.
$171,000
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