If the budgeted factory overhead cost is $460,000, the budgeted direct labor hours is 80,000, and the actual direct labor hours is 6,700 for the month, the amount of factory overhead to be allocated is $38,525 (if the allocation is based on direct labor hours). A. TrueB. False

TRUE

Explanation:

Now, Given that,

Total budget factory cost = 460000

Budgeted labour hours = 80 000

Actual direct labour hours = 6700

Thus,

Predetermined overhead rate = total budgeted factory cost : budgeted hours

= 460000 : 80000

= 5.75

Therefore,

Having gotten that, we can now calculate for amount of factory overhead which is given as

= Actual direct labour hours * predetermined rate

= 6700 * 5.75

= $38,525

$38525 is equivalent to the values given in the question, thus answer is TRUE.