Question

Arabica Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2012, they estimated total manufacturing overhead costs at $1,050,000, and they estimated total direct labor costs at $840,000. In June, 2012, Arabica completed job number 511. Job stats are as follows:

Direct materials cost $27,500

Direct labor cost $13,000

Direct labor hours 400 hours

Units of product produced: 200 crates

How much manufacturing overhead was allocated to the job?

A) $16,250

B) $10,400

C) $5,000

D) $34,375

Answer

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