Davis Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable manufacturing overhead rate is $1.70 per direct labor-hour; the budgeted fixed manufacturing overhead is $116,000 per month, of which $30,000 is factory depreciation.If the budgeted direct labor time for October is 8,000 hours, then the total budgeted manufacturing overhead for October is:

A) $129,600
B) $43,600
C) $99,600
D) $86,000

Question

Amber R Rodriguez · Accepted Answer

Final Answer : A, Explanation :  The total budgeted manufacturing overhead for October is calculated by adding the variable and fixed overhead costs. Variable overhead is $1.70 per direct labor-hour for 8,000 hours, which equals $13,600 ($1.70 * 8,000). The fixed manufacturing overhead is $116,000 per month. Therefore, the total budgeted manufacturing overhead for October is $129,600 ($13,600 + $116,000).

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