The information below relates to the factory overhead incurred by Burlywood, Inc

Question

The information below relates to the factory overhead incurred by Burlywood, Inc., in the month of September: Indirect labor cost $15,000 Electricity charges $ 9,450 Ordering costs $12,000 The indirect labor hours vary according to the number of hours worked. The workers worked for 3,000 hours in the month of September. Determine the expected indirect labor cost for the month of October if the workers are expected to work for 3,500 hours in the month of October. a. $16,500 b. $17,500 c. $14,000 d. $11,000

Explanation / Answer

Calculate indirect labour cost for the month of october:

Expected indirect labour = 15000/3000*3500 = 17500

So answer is b) $17500

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