Figure 2 the Overdale Plant Has Two Categories of Overhead

question 8

Multiple Choice

Figure 2 The Overdale plant has two categories of overhead: maintenance and inspection. Costs expected for these categories for the coming year are as follows:
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:
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 2. 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

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