Ashland Corporation estimates its manufacturing overhead costs to be $160,000 and its direct labor costs to be $320,000 for 2020. The actual manufacturing labor costs were $80,000 for job 1, $120,000 for job 2 and $160,000 for job 3 during 2020. Manufacturing overhead is applied to jobs on the basis of direct labor costs using a predetermined overhead rate. The actual manufacturing overhead cost for the year was $172,000.
The amount of overhead assigned to Job 3 during 2020 was:
A) $80,000.
B) $320,000.
C) $160,000.
D) $71,110.

Question

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The Answer of Ashland Corporation estimates its manufacturing overhead costs to be $160,000 and its direct labor costs to be $320,000 for 2020. The actual manufacturing labor costs were $80,000 for job 1, $120,000 for job 2 and $160,000 for job 3 during 2020. Manufacturing overhead is applied to jobs on the basis of direct labor costs using a predetermined overhead rate. The actual manufacturing overhead cost for the year was $172,000.
The amount of overhead assigned to Job 3 during 2020 was:
A) $80,000.
B) $320,000.
C) $160,000.
D) $71,110.

Ashland Corporation Estimates Its Manufacturing Overhead Costs to Be $160,000