Madison Manufacturing is using a manufacturing overhead application rate of 130% of direct labor dollars.A job uses 10 direct labor hours at $20 per hour.How much overhead should be applied to the job?

Question

Quizplus · Accepted Answer

The direct labor cost for the job is:
10 direct labor hours x $20 per direct labor hour = $200

The manufacturing overhead cost to be applied to the job is:
130% x $200 = $260

Therefore, the answer is C) $260.

Madison Manufacturing Is Using a Manufacturing Overhead Application Rate of 130