Shipping applies, overhead based on labor hours is $18.82.
How is it calculated labor hours?
By dividing the total number of finished items by the total amount of direct labor hours required to make them, labor hours are calculated.
Direct materials, $12.40
Direct labor ($13×18/60) $3.90
Direct labor hour ($8.40×18/60) $2.52
(direct materials+ direct labor + direct labor hour)
Total Cost $18.82
Hence, $18.82 is correct answer.
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