Jody Jewelry manufactures jewelry.In October Jody is planning to make 500 rings,400 bracelets,and 210 pendants.The company expects the total manufacturing overhead for the year would be $3,450,000 and that total direct labor hours for the year would be 75,000.Actual overhead incurred for October was $295,920.Each ring requires 6.25 hours of labor to manufacture; each bracelet requires 5.5 hours of labor to manufacture,and each pendant requires 4 hours of labor to manufacture.What is the standard overhead cost per ring?

Question

Quizplus · Accepted Answer

To calculate the standard overhead cost per ring, we need to use the predetermined overhead rate.

Predetermined overhead rate = Estimated total manufacturing overhead / Estimated total direct labor hours

Predetermined overhead rate = $3,450,000 / 75,000 = $46 per direct labor hour

To calculate the standard overhead cost per ring:

Standard overhead cost per ring = Predetermined overhead rate x Direct labor hours per ring

Standard overhead cost per ring = $46 x 6.25 = $287.50

Therefore, the standard overhead cost per ring is $287.50.

The correct answer is B).

Jody Jewelry Manufactures Jewelry