Dragon Fire Hot Sauce Makes Two Types of Hot Sauces-Meek

question 18

Multiple Choice

Dragon Fire Hot Sauce makes two types of hot sauces-meek and mild. Budgeted information for the two flavors appears below: $$\begin{array} { l r r } & { \text { Meek } } & \text { Mild } \\\text { Sales } & \$ 600,000 & \$ 400,000 \\\text { Direct materials } & \$ 100,000 & \$ 120,000 \\\text { Direct labor cost } & \$ 108,000 & \$ 180,000 \\\text { Labor hourly cost } & \$ 12.00 & \$ 12.000\end{array}$$ The company estimates it will incur $345,600 in overhead costs for the period. Dragon Fire allocates overhead cost to products based on the labor cost incurred. How much overhead is assigned to Mild?

• A) $216,000
• B) $28,800
• C) $56,250
• D) None of these answer choices are correct.

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