Question

The predetermined manufacturing overhead rate for the year was 140% of direct labor cost; employees were paid $17.50 per hour. If the estimated direct labor hours were 15,000, what was the estimated manufacturing overhead? A. $210,000. B. $187,500. C. $262,500. D. $367,500.

Answer 1

Answer:

D. $ 367.500

Explanation:

We have to first compute the total direct labor cost. This is done by multiplying the estimated direct labor hours with the hourly rate.

Total Direct Labour costs $ 17.50 per hour * 15,000 hours  =  $ 262,500

Estimated manufacturing overhead per the data in the question is 140 % of Direct labor cost,

Estimated manufacturing overhead is $ 262,500 * 140 % = $ 367,500