Answer:
The correct answer is D.
Explanation:
Giving the following information:
Neptune Accounting Services expects its accountants to work 26,000 direct labor hours per year. The company's estimated total indirect costs are $239,000. The direct labor rate is $75 per hour. The company uses direct labor hours as the allocation base for indirect costs.
Neptune performs a job requiring 20 hours of direct labor.
First, we need to calculate the overhead rate:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 239,000/26,000= $9.19 per direct labor hour.
Total cost= 75*20 + 20*9.19= $1,684
