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    Overhead Cost for Reddy Company

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    53. Reddy Company has the following cost formulas for overhead:

    Cost Cost Formula

    Indirect materials $2,000 plus $0.40 per machine hour
    Maintenance $1,500 plus $0.60 per machine hour
    Machine setup $0.30 per machine hour
    Utilities $200 plus $0.10 per machine hour
    Depreciation $800

    Based on these cost formulas, the total overhead cost at 600 machine hours is expected to be:
    A) $4,500. C) $5,620.
    B) $5,200. D) $5,340.

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    Solution Summary

    This solution explains the computation of overhead costs.