Tycoon Manufacturing uses a standard costing system. The standard time to produce one unit is 4 hours, and normal production is 5,000 units monthly. Overhead costs were estimated to be $250,000. The standard variable overhead rate is $5 per machine hour. During October the following results were recorded:
$\begin{array} { l l }
\text { Units produced } & 4,900 \
\text { Units sold } & 4,600 \
\text { Machine hours required } & 20,500 \
\text { Actual overhead cost } & \$ 248,000
\end{array}$
The total overhead allocated was:
A) $147,000
B) $98,000
C) $245,000
D) $252,500

Question

Tycoon Manufacturing uses a standard costing system. The standard time to produce one unit is 4 hours, and normal production is 5,000 units monthly. Overhead costs were estimated to be $250,000. The standard variable overhead rate is $5 per machine hour. During October the following results were recorded: 
$\begin{array} { l l } 
\text { Units produced } & 4,900 \
\text { Units sold } & 4,600 \
\text { Machine hours required } & 20,500 \
\text { Actual overhead cost } & \$ 248,000
\end{array}$ 
The total overhead allocated was:
A) $147,000
B) $98,000
C) $245,000
D) $252,500

Quizplus · Accepted Answer

The total overhead allocated is calculated based on the standard variable overhead rate and the actual machine hours used. The standard variable overhead rate is $5 per machine hour, and the actual machine hours required were 20,500. Therefore, the total overhead allocated is 20,500 hours * $5/hour = $102,500. However, this calculation was incorrect. The correct calculation for the total overhead allocated should consider the standard machine hours for the actual production, which is 4 hours per unit * 4,900 units = 19,600 hours. Therefore, the correct total overhead allocated is 19,600 hours * $5/hour = $98,000. My initial explanation contained a miscalculation. The correct answer, based on the standard costing system and the information provided, should be calculated as follows: The standard time to produce one unit is 4 hours, and 4,900 units were produced. Therefore, the standard hours for the actual production are 4 hours/unit * 4,900 units = 19,600 standard hours. The standard variable overhead rate is $5 per machine hour, so the total overhead allocated is 19,600 standard hours * $5/standard hour = $98,000. Hence, the correct choice is B) $98,000.

Tycoon Manufacturing Uses a Standard Costing System The Total Overhead Allocated Was: A) $147,000 B) $98,000 C)

Tycoon Manufacturing Uses a Standard Costing System The Total Overhead Allocated Was:
A) $147,000
B) $98,000
C)