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The Botosan Factory has determined that its budgeted factory overhead budget for the year is $13,500,000 and budgeted direct labor hours are 10,000,000. If the actual direct labor hours for the period are 350,000, how much overhead would be allocated to the period?
a.$472,500
b.$675,000
c.$236,250
d.$470,630

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akiran007

Answer:

a.$472,500

Actual factory overhead applied = $ 1.35 *350,000= $ 472,500

Explanation:

Choice a is the correct answer. Actual factory overhead applied = $ 1.35 *350,000= $ 472,500

Working

Budgeted factory overhead budget for the year is $13,500,000

Budgeted direct labor hours are 10,000,000.

Budgeted factory overhead budget per hour for the year is =$13,500,000/10,000,000 =  $ 1.35 per hour

Actual direct labor hours for the period are 350,000

Actual factory overhead applied = $ 1.35 *350,000= $ 472,500

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