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Balcom Enterprises is planning to introduce a new product that will sell for $140 a unit Manufacturing cost estimates for 24,500 units for the first
Balcom Enterprises is planning to introduce a new product that will sell for $140 a unit Manufacturing cost estimates for 24,500 units for the first year of production are: Direct materials $1,445,500 Direct labor $833,000 (based on $17 per hour x 49,000 hours) Although overhead has not been estimated for the new product, monthly data for Balcom's total production for the last two years he been analyzed using simple linear regression. The analysis results are as follows: Dependent variable Independent variable Intercept Coefficient on independent variable Coefficient of correlation R2 Factory overhead costs Direct labor hours $ 129,000 $ 4.00 0.938 0.832 Based on this information, what is the total overhead cost for an estimated activity level of 54,000 direct labor-hours? O $216,000 O $345,000 O $516,000 $134,000
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