Hamilton Has Budgeted Total Manufacturing Overhead Costs for the Year

Multiple Choice

Hamilton has budgeted total manufacturing overhead costs for the year as $125 000, based on 20 000 direct labour hours. The ratio of variable manufacturing overhead costs to fixed manufacturing overhead costs is 2:1. In a given month, 2000 direct labour hours are budgeted for production. How much overhead is budgeted?

A) $6250
B) $12 500
C) $18 750
D) $25 000