Reference: 17_03
Heritage Industries Produces Miniature Models of Farm Equipment

Multiple Choice

Reference: 17_03
Heritage Industries produces miniature models of farm equipment. These collectibles are in great demand. It takes two operations, molding and finishing, to complete the miniatures. Next year's expected activities are shown in the following table:
$$\begin{array} { | l | c | c | } \hline & \text { Molding } & \text { Finishing } \\\hline \text { Direct labor hours } & 65,000 \mathrm { DLH } & 162,500 \mathrm { DLH } \\\hline \text { Machine hours } & 97,500 \mathrm { MH } & 81,250 \mathrm { MH } \\\hline\end{array}$$
-Heritage Industries uses departmental overhead rates and is planning on a $2 per machine hour overhead rate for the molding department.Compute the estimated manufacturing overhead cost for the molding department given the information shown in the table.

A) $195,000
B) $162,500
C) $130,000
D) $325,000
E) $357,500