Deltan Corp.allocates overhead to production on the basis of direct labor costs.If Deltan's total estimated overhead is $450,000 and estimated direct labor cost is $180,000,determine the amount of overhead to be allocated to finished goods inventory.There is $20,000 of total direct labor cost in the jobs in the finished goods inventory.
A) $8,000
B) $20,000
C) $70,000
D) $50,000
E) $90,000

Question

Quizplus · Accepted Answer

OH rate = $450,000/$180,000 = 250%
OH allocated = 250% x $20,000 = $50,000