Builder Giant Estimates the Following Overhead Costs for 2017 Builder Giant Incurred the Following Costs for 2017 for Job

question 113

Multiple Choice

Builder Giant estimates the following overhead costs for 2017: $$\begin{array} { l r } \text { Equipment depreciation } & \$ 30,000 \\\text { Equipment maintenance } & 64,000 \\\text { Factory management salaries } & 150,000 \\\text { Factory rent } & 50,000 \\\hline \text { Total manufacturing overhead } & \$ 294,000\end{array}$$ Builder Giant incurred the following costs for 2017 for job A56: $$\begin{array} { l l } \text { Direct material } & \$ 40,000 \\\text { Direct labor } & \$ 12,800\end{array}$$
Other jobs incurred $183,200 of direct labor.Builder Giant also budgeted $210,000 in direct labor costs and 20,000 machine hours for 2017.Actual manufacturing overhead for 2017 was $336,000.How much is the predetermined overhead rate using direct labor cost as the allocation base?

• A)$14.70
• B)$1.60
• C)$1.50
• D)$1.40

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