The Botosan Factory has determined that its budgeted factory overhead budget for the year is $13,500,000 and budgeted direct labor hours are 10,000,000.If the actual direct labor hours for the period are 350,000,how much overhead would be allocated to the period?
A) $675,000
B) $470,630
C) $472,500
D) $236,250

Question

Quizplus · Accepted Answer

The overhead rate per direct labor hour is calculated as $13,500,000 / 10,000,000 hours = $1.35 per hour. For 350,000 actual direct labor hours, the allocated overhead would be 350,000 hours * $1.35/hour = $472,500.

The Botosan Factory Has Determined That Its Budgeted Factory Overhead