Answer:
The correct answer is $138,500.
Explanation:
According to the scenario, the given data are as follows:
WIP beginning = $10,500
WIP ending = $19,000
Cost of goods manufactured = $323,000
Direct material = $115,000
Direct labor = $78,000
So, we can calculate the amount of overhead by using following formula:
Overheads = Total manufacturing costs - Direct materials - Direct labor
Where, Total manufacturing cost = Cost of goods manufactured + Ending WIP - Beginning WIP
= $323,000 + $19,000 - $10,500
= $331,500
So, by putting the value in the formula:
Overheads = $331,500 - $115,000 - $78,000
= $138,500
Hence, the amount of overhead is $138,500.
