Wicks Company Has Established a Flexible Budget for Manufacturing Overhead

Wicks Company has established a flexible budget for manufacturing overhead based on direct labour-hours. Budgeted costs at 100,000 direct labour-hours are as follows: $\begin{array} { l l } \text { Variable costs (total) :}\\\text { Packing supplies } & £ 70,000 \\ \text { Indirect labour } & £ 90,000\\ \text { Fixed costs (total) :}\\ \text { Utilities}& £50,000\\ \text { Rent}& £20,000\\ \text { Insurance}& £10,000 \end{array}$

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If Wicks Company plans to operate at 90,000 direct labour-hours during the next period, the flexible budget would show indirect labour costs of

A) £144,000.
B) £63,000.
C) £90,000.
D) £81,000.

Correct Answer:

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