A work element in the project plan requires 50 hours of labor each by four carpenters.The carpenters are paid $15 per hour and incur an overhead rate equal to 80 percent of their direct labor charges.Based on this data,the appropriate total cost is __________.
A)$2,400
B)$3,000
C)$5,400
D)$4,600

Question

Quizplus · Accepted Answer

Total labor hours required = 50 hours x 4 carpenters = 200 hours
Direct labor cost = Total labor hours x Carpenter pay rate = 200 hours x $15 per hour = $3,000
Overhead cost = 80% of direct labor cost = 0.8 x $3,000 = $2,400
Total cost = Direct labor cost + Overhead cost = $3,000 + $2,400 = $5,400.

Therefore, the appropriate total cost is $5,400 which is option C.

A Work Element in the Project Plan Requires 50 Hours