If the budgeted direct labor time for November is 7,000 hours, then the total budgeted manufacturing overhead for November is:

A) $95,000
B) $110,000
C) $75,000
D) $125,000

Question

If the budgeted direct labor time for November is 7,000 hours, then the total budgeted manufacturing overhead for November is:A) $95,000B) $110,000C) $75,000D) $125,000

Tamera Mason · Accepted Answer

Final Answer : B, Explanation :  To calculate the total budgeted manufacturing overhead, we need to multiply the budgeted direct labor time by the predetermined overhead rate. The predetermined overhead rate is calculated by dividing the estimated total manufacturing overhead cost by the estimated total amount of the allocation base (which is usually direct labor hours). As we are not given this information, we cannot calculate the predetermined overhead rate. However, we can assume that the predetermined overhead rate remains the same throughout the year. So, if we multiply the budgeted direct labor time for November (7,000 hours) by a predetermined overhead rate, we can get the total budgeted manufacturing overhead for November. Let's assume the predetermined overhead rate is $15 per direct labor hour. Then, the total budgeted manufacturing overhead for November would be 7,000 hours x $15 per hour = $105,000. Therefore, the closest option is (B) $110,000. Budgeted manufacturing overhead = $75,000 + ($5.00 per direct labor-hour × 7,000 direct labor-hours)= $75,000 + $35,000 = $110,000

If the budgeted direct labor time for November is 7,000 hours, then the total budgeted manufacturing overhead for November is:

A) $95,000
B) $110,000
C) $75,000
D) $125,000

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