Lewis Production is planning to sell 220 boxes of bricks and produce 200 boxes of bricks during May.Each box of bricks requires 20 kilograms of brick mix and a half hour of direct labour.Brick mix costs $5 per 100 kilograms and employees of the company are paid $12.00 per hour.Manufacturing overhead is applied at a rate of 120% of direct labour costs.Lewis Production has 600 kilograms of brick mix in beginning inventory and wants to have 800 kilograms of brick mix in ending inventory.What is the total amount to be budgeted for manufacturing overhead for the month?
A)$1,440
B)$2,640
C)$2,400
D)$1,200

Question

Quizplus · Accepted Answer

Direct labor cost = 200 boxes * 0.5 hours/box * $12.00/hour = $1,200Manufacturing overhead = 120% * $1,200 = $1,440

Lewis Production Is Planning to Sell 220 Boxes of Bricks