The Ramirez Company Budgets Variable Manufacturing Overhead at 60% of Direct

Multiple Choice

The Ramirez Company budgets variable manufacturing overhead at 60% of direct labor costs.If the company estimates that 10,000 direct labor hours will be used at an average rate of $8.50 per hour.Fixed manufacturing overhead costs are budgeted at $45,000 with $10,000 of that amount being depreciation on plant machinery.Total budgeted manufacturing overhead will be:

A) $130,000
B) $96,000
C) $120,000
D) $86,000