Answer:
Total overhead cost= $988,000
Explanation:
Giving the following information:
Activity level= 100,000 machine hours
Indirect labor $480,000
Machine supplies 120,000
Indirect materials 140,000
Depreciation on factory building 100,000
First, we need to calculate the unitary overhead costs per machine-hours. <u>Depreciation is a fixed cost.</u>
Indirect labor= 480,000/100,000= $4.8
Machine supplies= 120,000/100,000= $1.2
Indirect materials= 140,000/100,000= $1.4
<u>Now, we can determine the total overhead cost for 120,000 machine hours.</u>
<u></u>
Indirect labor= 4.8*120,000= 576,000
Machine supplies= 1.2*120,000= 144,000
Indirect materials= 1.4*120,000= 168,000
Depreciation= 100,000
Total overhead cost= $988,000
