The following data pertains to activity and costs for two months: june july activity level in 10,000 12,000 direct materials $16,000 $ ? fixed factory rent 12,000 ? manufacturing overhead 10,000 ? total cost $38,000 $42,900 assuming that these activity levels are within the relevant range, the manufacturing overhead for july was: a) $10,000 b) $11,700 c) $19,000 d) $9,300

B) $11,700

Explanation:

The computation of the manufacturing overhead is shown below:

Total cost = Direct material +  Fixed factory rent +  Manufacturing overhead

where,

Direct material = July units × (direct material cost ÷ June units)

                        = 12,000 units × ($16,000 ÷ 10,000 units)

                        = $19,200

The other items values would remain the same.

Now put these values to the above formula  

So, the value would equal to

$42,900 = $19,200 + $12,000 + Manufacturing overhead

$42,900 = $31,200 + Manufacturing overhead

So, manufacturing overhead = $11,700

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