ABC Company has a variable manufacturing overhead rate of $4 per direct labor hour. If 200 direct labor hours are budgeted and fixed manufacturing overhead is $5,000, including $900 of depreciation, what is the total budgeted manufacturing overhead for the period?

(A) $4,900

(B) $6,700

(C) $5,800

(C) $5,800

Explanation:

Total Manufacturing overhead is a function of costs such electricity used to operate the production machines, depreciation cost on the factory assets, factor personnel outside of direct labor.

As such, given that ABC Company has a variable manufacturing overhead rate of $4 per direct labor hour. If 200 direct labor hours are budgeted and fixed manufacturing overhead is $5,000, including $900 of depreciation,

Total budgeted manufacturing overhead

= ($4 * 200) + $5,000

= $5800