Figure 11-4
the Overdale Plant Has Two Categories of Overhead $\begin{array}{ll}\text { Maintenance } & £ 120,000 \\\text { Inspection } & £ 200,000\end{array}$

question 22

Multiple Choice

Figure 11-4
The Overdale plant has two categories of overhead: maintenance and inspection. Costs expected for these categories for the coming year are as follows: $\begin{array}{ll}\text { Maintenance } & £ 120,000 \\\text { Inspection } & £ 200,000\end{array}$ The plant currently applies overhead using direct labour hours and expected capacity of 80,000 direct labour hours. The following data has been assembled for use in developing a bid for a proposed job: $\begin{array}{ll}\text { Direct materials } & £ 1,500 \\\text { Direct labour } & £ 5,000 \\\text { Machine hours } & 400 \\\text { Number of inspections } & 6 \\\text { Direct labour hours } & 750\end{array}$ Total expected machine hours for all jobs during the year are 40,000, and the total expected number of inspections is 2,500.
-Refer to Figure 11-4. Using direct labour hours to assign overhead, the total cost of the potential job would be

• A)£9,500.
• B)£6,000.
• C)£3,000.
• D)£1,600.