The following data pertains to activity and costs for two months:

June July

Activity level in units 10,000 12,000

Direct materials $ 16,000 $?

Fixed factory rent 12,000?

Manufacturing overhead 10,000?

Total cost $ 38,000 $ 42,900

Assuming that these activity levels are within the relevant range, the manufacturing overhead for July was:

Multiple Choice:

A. $10,000

B. $11,700

C. $19,000

D. $9,300

The correct answer is D.

Explanation:

Giving the following information:

The following data pertains to activity and costs for two months:

June July

Activity level in units 10,000 12,000

Direct materials $ 16,000 $?

Fixed factory rent 12,000?

Manufacturing overhead 10,000?

Total cost $ 38,000 $ 42,900

First, we need to calculate the unitary variable cost of direct material and direct labor.

Unitary cost Direct material = 16,000/10,000 = 1.6 per unit

Unitary cost Direct Labor = 12,000/10,000 = 1.2 per unit

Now, we calculate the cost of the prime costs of 12,000 units:

Direct material = 1.6*12,000 = 19,200

Direct labor = 1.2*12,000 = 14,400

Total = $33,600

Manufacturing overhead = 42,900 - 33,600 = $9,300