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21 December, 01:02

ABC Company has a variable manufacturing overhead rate of $4 per direct labor hour. If 200 direct labor hours are budgeted and fixed manufacturing overhead is $5,000, including $900 of depreciation, what is the total budgeted manufacturing overhead for the period?

(A) $4,900

(B) $6,700

(C) $5,800

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  1. 21 December, 01:14
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    (C) $5,800

    Explanation:

    Total Manufacturing overhead is a function of costs such electricity used to operate the production machines, depreciation cost on the factory assets, factor personnel outside of direct labor.

    As such, given that ABC Company has a variable manufacturing overhead rate of $4 per direct labor hour. If 200 direct labor hours are budgeted and fixed manufacturing overhead is $5,000, including $900 of depreciation,

    Total budgeted manufacturing overhead

    = ($4 * 200) + $5,000

    = $5800
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