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In the Proctor Company, indirect labor is budgeted for $24,000 and factory supervision is budgeted for $8,000 at normal capacity of 80,000 direct labor hours. If 90,000 direct labor hours are worked, flexible budget total for these costs is_________.A) $35,000. B) $32,000. C) $36,000. D) $33,000.

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Answer:

The correct answer is C.

Explanation:

Giving the following information:

In the Proctor Company, indirect labor is budgeted for $24,000 and factory supervision is budgeted for $8,000 at a normal capacity of 80,000 direct labor hours.

First, we need to calculate the overhead cost per hour:

Overhead cost per hour= (24,000 + 8,000)/80,000= $0.4 per hour

Now, we can calculate the total cost of 90,000 hours.

Overhead cost= 90,000*0.4= $36,000

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