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QUESTIONS 21 & 22 ARE BASED ON THE FOLLOWING INFORMATION.

Barrick Company has established a flexible budget for manufacturing overhead based on direct

labor- hours. At the 200,000 direct-labor hour capacity level, total budgeted manufacturing

overhead costs are as follows:

Variable costs:

Packing supplies ....................................................................... $120,000

Indirect labor.............................................................................. 180,000

Total variable costs .............................................................. 300,000

Fixed costs:

Maintenance .............................................................................. 100,000

Rent .............................................................................................. 40,000

Insurance...................................................................................... 20,000

Total fixed costs ................................................................... 160,000

Total costs ...................................................................................... $460,000

21.

At an activity level of 170,000 direct labor-hours, the flexible budget for factory

overhead would show the budgeted amount for maintenance as:

A) $ 85,000.

B) $140,000.

C) $160,000.

D) $100,000.

22.

If Barrick Company plans to operate at 190,000 direct labor-hours during the next

period, the flexible budget would show total costs of:

A) $171,000.

B) $460,000.

C) $445,000.

D) $270,000.

I know answer 21 is 100,000 and answer 22 is 445,000, can you please explain work

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