The predetermined overhead rate for manufacturing overhead for Mansfield Corporation was $8.00 per direct labor hour.The estimated labor rate was $10.00 per hour.If the estimated direct labor cost was $150,000,what was the estimated manufacturing overhead?
A)$93,750.
B)$75,000.
C)$120,000.
D)$15,000.

Question

Quizplus · Accepted Answer

The estimated manufacturing overhead can be calculated using the predetermined overhead rate and the estimated direct labor cost. 
Manufacturing overhead = Predetermined overhead rate x Estimated direct labor cost 
Manufacturing overhead = $8 x 150,000 
Manufacturing overhead = $1,200,000 
Therefore, the estimated manufacturing overhead is $120,000. Option C is the correct answer.

The Predetermined Overhead Rate for Manufacturing Overhead for Mansfield Corporation