Orange Corporation manufactures custom-made wallets. The following data pertains

Question

Orange Corporation manufactures custom-made wallets. The following data pertains to Job GH7: Direct materials placed into productiorn Direct labor hours worked Direct labor rate per hour Machine hours worked 75 hours S35 200 hours Factory overhead is applied using a predetermined overhead rate based on direct labor hours. Factory overhead was budgeted at $100,000 for the year, and the direct labor hours were estimated to be 25,000. Job GH7 consists of 60 units. What is overhead cost assigned to Job GH7? $240 $400 $210 $160

Explanation / Answer

·         overhead cost assigned to Job GH7=Factory overhead/total direct labor hours*number of units

=$100,000/25,000*60

=$240

Option A is correct

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