Better Products Company manufactures insulation and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $18 per direct labor-hour. The following data are obtained from the accounting records for October 2018:

Direct materials Direct labor (3,500 hours $16/hour) Indirect labor Plant facility rent Depreciation on plant machinery and equipment Sales commissions Administrative expenses S410,000 56,000 19,000 59,000 43,000 17,000 26,000

The actual amount of manufacturing overhead costs incurred in October 2018 totals. A. $121,000 B. $128,000 C. $164,000 D. $279,500

Question

Business

Donaldson

12 October, 17:03

Better Products Company manufactures insulation and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $18 per direct labor-hour. The following data are obtained from the accounting records for October 2018:

Direct materials Direct labor (3,500 hours $16/hour) Indirect labor Plant facility rent Depreciation on plant machinery and equipment Sales commissions Administrative expenses S410,000 56,000 19,000 59,000 43,000 17,000 26,000

The actual amount of manufacturing overhead costs incurred in October 2018 totals. A. $121,000 B. $128,000 C. $164,000 D. $279,500

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Answers (1)

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Jane Larsen · Answer 1

Actual overhead = $121,000

Explanation:

Giving the following information:

Indirect labor = 19,000

Plant facility rent = 59,000

Depreciation on plant machinery and equipment = 43,000

The actual manufacturing overhead includes all the product costs that can't be directly allocated to a product.

In this exercise, the overhead is the indirect labor, plant facility, and depreciation expense.

Actual overhead = 19,000 + 59,000 + 43,000 = $121,000