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Question: merry co has two major categories of manufacturing overhead material...

Question details

Merry Co. has two major categories of manufacturing overhead: material handling and quality control. The costs expected for these categories for the coming year are as follows:

Material handling

$120,000

Quality inspection

200,000

The plant currently applies overhead based on direct labor hours. The estimated direct labor hours are 80,000 per year. The plant manager is asked to submit a bid and assembles the following data on a proposed job:

Direct materials

$4,000

Direct labor (2,000 hours)

6,000

What is the estimated product cost on the proposed job?

A) $8,000

B) $10,000

C) $18,000

D) $14,000

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