Jordan Manufacturing Company expects to incur the following per-unit costs for 1,000 units of production: $$\begin{array} { l l }
\text { Direct materils } & 3 \mathrm { lb } \text { @ } \$ 5 = \$ 15 \
\text { Direct labou } & 1 \mathrm { hr } @ \$ 6 = \$ 6 \
\text { Variable overhead } & 75 \% \text { of direct labour costs } \
\text { Fixed overhead } & 50 \% \text { of direct labour costs }
\end{array}$$
- What is the total amount of overhead included in the overhead budget?

Question

Jordan Manufacturing Company expects to incur the following per-unit costs for 1,000 units of production: $$\begin{array} { l l } 
\text { Direct materils } & 3 \mathrm { lb } \text { @ } \$ 5 = \$ 15 \
\text { Direct labou } & 1 \mathrm { hr } @ \$ 6 = \$ 6 \
\text { Variable overhead } & 75 \% \text { of direct labour costs } \
\text { Fixed overhead } & 50 \% \text { of direct labour costs }
\end{array}$$
- What is the total amount of overhead included in the overhead budget?

Quizplus · Accepted Answer

The overhead cost per unit is $7.50, so the total overhead budget would be $7.50 per unit x 1,000 units = $7,500. Therefore, the correct answer is C.

Jordan Manufacturing Company Expects to Incur the Following Per-Unit Costs