Budget Electronics is planning to sell 2,200 and produce 2,000 wicker baskets during June.Each unit requires 120 linear feet of wicker and 0.70 hours of direct labor.Wicker costs $0.35 per linear foot and employees of the company are paid $13.00 per hour.Manufacturing overhead is applied at a rate of 140% of direct labor costs.The company wants to have 10% of the wicker needed for the next month's production available at the end of each month.The expected production in July is 1,800 baskets.How much manufacturing overhead will be charged to each basket sold during June?

Question

Quizplus · Accepted Answer

Manufacturing overhead per basket is calculated based on direct labor costs. Direct labor cost per basket is 0.70 hours * $13.00/hour = $9.10. Manufacturing overhead is applied at 140% of direct labor costs, so manufacturing overhead per basket is $9.10 * 140% = $12.74.

Budget Electronics Is Planning to Sell 2,200 and Produce 2,000