Nautical Creations manufactures high-end boat accessories for large custom yachts.Nautical has always applied manufacturing overhead using a traditional predetermined overhead rate based on direct labor hours, this year it is $45 per DLH.Nautical is currently evaluating the use of activity-based driver rates to apply manufacturing overhead cost and has assembled the following budgeted amounts and actual activity required to produce Job #258.

\begin{array}{llrl}&&\text { Budgeted} & \text { Activity used }\\\text { Activity Driver } & \text { Budgeted Cost } & \text { Activity } & \text { on Job } \# 258\\\text { Machining time } & \$ 200,000 & 5,000 \text { hours } & 600\text { hours } \\\text { Direct labor time } & \$ 220,000 & 10,00 0 \text { hours } & 800 \text { hours } \\\text { Quality inspection time } & \$ 30,000 & 2,000 \text { hours } & 200 \text { hours }\end{array}

Using the activity-based costing method of applying manufacturing overhead, the amount of overhead applied to Job #258 would be:
A)$36,000.
B)$44,600.
C)$63,000.
D)$72,000.

Which of the Following Will Cause Income Determined with Absorption

Multiple Choice

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