Question Help Lariat Lariat Co. budgets production of 120 comma 000 120,000 units in the next year. Lariat Lariat's CFO expects that each unit will take 14 14 hours to produce at an hourly wage rate of $ 8 $8 per hour. If factory overhead is applied to direct labor hours at $ 9 $9 per hour, the budget for factory overhead will total: A. $ 13 comma 440 comma 000 $13,440,000 B. $ 15 comma 120 comma 000 $15,120,000 C. $ 8 comma 640 comma 000 $8,640,000 D. $ 28 comma 560 comma 000 $28,560,000

B. $ 15 comma 120 comma 000 $15,120,000

Explanation:

The computation of the factory overhead is shown below:

= Number of production units in the next year  × required number of hours to produced × factory overhead rate per hours

= 120,000 units × 14 hours × $9 per hour

= $15,120,000

By multiplying the number of units produced with the required number of hours and factory overhead rate per hour we can get the factory overhead amount

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