Arabica Manufacturing Company Uses a Predetermined Manufacturing Overhead Rate Based

Arabica Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2012, they estimated total manufacturing overhead costs at $1,050,000, and they estimated total direct labor costs at $840,000. In June, 2012, Arabica completed job number 511. Job stats are as follows:
$$\begin{array} { l l } \text { Direct materials cost } & \$ 27,500 \\\text { Direct labor cost } & \$ 13,000 \\\text { Direct labor hours } & 400 \text { hours } \\\text { Units of product produced: } & 200 \text { crates }\end{array}$$
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How much manufacturing overhead was allocated to the job?

A) $16,250
B) $10,400
C) $5,000
D) $34,375

Correct Answer:

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