Answer:
The correct option is D. $50,000.
Explanation:
This can be calculated using the following formula:
Overhead allocated to finished goods inventory = (Total direct labor cost in the cost in the jobs in the finished goods inventory / Estimated direct labor) * Total estimated overhead ................. (1)
Where;
Total direct labor cost in the cost in the jobs in the finished goods inventory = $20,000
Estimated direct labor = $180,000
Total estimated overhead = $450,000
Substituting the values into equation (1), we have:
Overhead allocated to finished goods inventory = ($20,000 / $180,000) * $450,000 = 0.111111111111111 * $450,000 = $50,000
Therefore, the correct option is D. $50,000.
