The following cost functions were developed for manufacturing overhead costs: $$\begin{array} { l l }
\text { Manufacturing Overhead Cost } & \text { Cost Function } \
\text { Electricity } & \$ 200 + \$ 20 \text { per direct labour hour } \
\text { Maintenance } & \$ 400 + \$ 30 \text { per direct labour hour } \
\text { Supervisors' salaries } & \$ 20000 \text { per month } \
\text { Indirect materials } & \$ 16 \text { per direct labour hour }
\end{array}$$ If June production is expected to be 2,000 units requiring 3,000 direct labour hours,what would be the estimated manufacturing overhead costs?
A)$20,733
B)$152,600
C)$198,000
D)$218,600

Question

The following cost functions were developed for manufacturing overhead costs: $$\begin{array} { l l } 
\text { Manufacturing Overhead Cost } & \text { Cost Function } \
\text { Electricity } & \$ 200 + \$ 20 \text { per direct labour hour } \
\text { Maintenance } & \$ 400 + \$ 30 \text { per direct labour hour } \
\text { Supervisors' salaries } & \$ 20000 \text { per month } \
\text { Indirect materials } & \$ 16 \text { per direct labour hour }
\end{array}$$ If June production is expected to be 2,000 units requiring 3,000 direct labour hours,what would be the estimated manufacturing overhead costs?
A)$20,733
B)$152,600
C)$198,000
D)$218,600

Quizplus · Accepted Answer

The total manufacturing overhead cost is calculated by summing all the individual costs: Electricity ($200 + $20 * 3000), Maintenance ($400 + $30 * 3000), Supervisors' salaries ($20,000), and Indirect materials ($16 * 3000). This results in a total of $218,600.

The Following Cost Functions Were Developed for Manufacturing Overhead Costs