It takes 30 minutes of direct labor time to make one unit. Direct labor wages average $17 per hour. Variable overhead is applied at the rate of $5 per direct labor hour. Fixed overhead is budgeted at $56,500 per month.
-Refer to Figure 9-4. What is the budgeted overhead for November?

Question

Quizplus · Accepted Answer

To calculate the budgeted overhead for November, we need to add the variable and fixed overhead costs.

Variable overhead cost = Direct labor hours x Variable overhead rate

Variable overhead cost = 30 x $5 = $150

Fixed overhead cost = $56,500

Total budgeted overhead = Variable overhead cost + Fixed overhead cost

Total budgeted overhead = $150 + $56,500 = $56,650

Therefore, the correct answer is C) $404,000.

It Takes 30 Minutes of Direct Labor Time to Make