BirdCo's Master Budget Shows That the Planned Activity Level for Next

BirdCo.'s master budget shows that the planned activity level for next year is expected to be 20,000 machine hours. At this level of activity, the following manufacturing overhead costs are expected: $\begin{array}{lr}\text { Indirect labour } & \$ 45,000 \\\text { Factory supplies } & 4,000 \\\text { Indirect materials } & 21,000 \\\text { Amortization on factory building (straight line) } & \underline {15,000}\\\text { Total manufacturing overhead } &\underline { \$85,000}\end{array}$ If BirdCo. operates at 21,000 machine hours, how much is allowed on a flexible budget for manufacturing overhead costs?

A) $48,500.
B) $69,500.
C) $73,500.
D) $88,500.
E) $89,250.

Correct Answer:

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