Question

Question Help Lariat Lariat Co. budgets production of 120 comma 000 120,000 units in the next year. Lariat Lariat​'s CFO expects that each unit will take 14 14 hours to produce at an hourly wage rate of $ 8 $8 per hour. If factory overhead is applied to direct labor hours at $ 9 $9 per​ hour, the budget for factory overhead will​ total: A. $ 13 comma 440 comma 000 $13,440,000 B. $ 15 comma 120 comma 000 $15,120,000 C. $ 8 comma 640 comma 000 $8,640,000 D. $ 28 comma 560 comma 000 $28,560,000

Answer 1

B. $ 15 comma 120 comma 000 $15,120,000

Step-by-step explanation:

The computation of the factory overhead is shown below:

= Number of production units in the next year × required number of hours to produced × factory overhead rate per hours

= 120,000 units × 14 hours × $9 per hour

= $15,120,000

By multiplying the number of units produced with the required number of hours and factory overhead rate per hour we can get the factory overhead amount