Olympia Manufacturing Uses a Predetermined Overhead Allocation Rate Based on a Percentage

question 27

Multiple Choice

Olympia Manufacturing uses a predetermined overhead allocation rate based on a percentage of direct labor cost. At the beginning of 2014, Olympia estimated total manufacturing overhead costs at $1,050,000 and total direct labor costs at $840,000. In June, 2014, Job 511 was completed. Job stats are as follows: $$\begin{array} { | l | r | } \hline \text { Direct materials cost } & \$ 27,500 \\\hline \text { Direct labor cost } & \$ 13,000 \\\hline \text { Direct labor hours } & 400 \text { hours } \\\hline \text { Units of product produced } & 200 \\\hline\end{array}$$ What is the amount of manufacturing overhead costs allocated to Job 511?

• A) $16,250
• B) $10,400
• C) $5,000
• D) $34,375