Gell Corporation manufactures computers. Assume that Gell:
• Allocates manufacturing overhead based on machine hours
• Estimated 12,000 machine hours and $93,000 of manufacturing overhead costs
• Actually used 16,000 machine hours and incurred the following actual costs:
Indirect labor .......................................... $ 11,000
Depreciation on plant .................................... 48,000
Machinery repair ......................................... 11,000
Direct labor ............................................... 75,000
Plant supplies ............................................. 6,000
Plant utilities .............................................. 7,000
Advertising ............................................... 35,000
Sales commissions ....................................... 27,000
How much manufacturing overhead would Gell allocate?
(i). $83,000
(ii). $93,000
(iii). $124,000
(iv). $220,000