The predetermined manufacturing overhead rate for 2016 was $4.00 per direct labor hour;employees were paid $5.00 per hour.If the estimated direct labor cost was $75,000,what was the estimated manufacturing overhead?
A) $15,000.
B) $60,000.
C) $75,000.
D) $93,750.

Question

Quizplus · Accepted Answer

The estimated manufacturing overhead can be calculated by multiplying the predetermined manufacturing overhead rate by the estimated direct labor hours. Since the predetermined rate is $4.00 per direct labor hour and the estimated direct labor cost is $75,000, we can assume that the estimated direct labor hours is 75,000 / 5 = 15,000 hours. Multiplying the estimated direct labor hours by the predetermined manufacturing overhead rate gives us $4.00 x 15,000 = $60,000 as the estimated manufacturing overhead. Therefore, the correct choice is B.

The Predetermined Manufacturing Overhead Rate for 2016 Was $4