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Spartan Corporation estimates that it will incur $200,000 of total manufacturing overhead cost at an estimated activity level of 10,000 direct labor-hours. What is the amount of manufacturing overhead that would be applied to a job that required 200 direct labor-hours?A. $2,000B. $4,000C. $6,000D. $10,000

User Maveroid
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Answer:

B. $4,000

Step-by-step explanation:

The total manufacturing cost in management accounting is usually a function of a variable element such as labor hours, machine hours, direct raw materials etc.

There is a direct proportion relationship between the manufacturing overhead cost and direct labor-hours.

Given that Spartan Corporation estimates that it will incur $200,000 of total manufacturing overhead cost at an estimated activity level of 10,000 direct labor-hours.

At an activity level of 200 direct labor hours

$200,000/10,000 = x/200

x = $4,000

where x is the amount of manufacturing overhead that would be applied to a job that required 200 direct labor-hours

User Tristan Lee
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