Mesa Corp.allocates overhead to production on the basis of direct labor costs.Mesa's total estimated overhead is $450,000 and estimated direct labor is $180,000.Determine the amount of overhead applied to a job which used $20,000 of direct labor.

A) $8,000.
B) $20,000.
C) $70,000.
D) $50,000.
E) $90,000.

To calculate the overhead applied to a job, we have to use the predetermined overhead rate, which is calculated as follows:

Predetermined overhead rate = Total estimated overhead / Estimated direct labor costs
Predetermined overhead rate = $450,000 / $180,000
Predetermined overhead rate = $2.50 per direct labor dollar

Therefore, the overhead applied to a job that used $20,000 of direct labor is:

Overhead applied = Predetermined overhead rate x Direct labor cost
Overhead applied = $2.50 x $20,000
Overhead applied = $50,000

Therefore, the correct answer is D)$50,000.