A manufacturing company has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period:
The overhead applied to products during the period was closest to:
A) $79,118
B) $76,035
C) $77,440
D) $80,145

Question

A manufacturing company has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:  The following data pertain to operations for the most recent period:
 The overhead applied to products during the period was closest to:
A) $79,118 
B) $76,035 
C) $77,440 
D) $80,145

Quizplus · Accepted Answer

Variable overhead + Fixed overhead = $28,490 + $47,545
Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $76,035 ÷ 3,700 MHs = $20.55 per MH
Overhead applied = Predetermined overheard rate × Standard hours allowed for the actual output
= $20.55 per MH × 3,850 MHs = $79,117.50

A Manufacturing Company Has a Standard Costing System Based on Standard