Figure 17-6 $\begin{array}{lr}
\text { Budgeted fixed overhead for the year } & £ 300,000 \
\text { Budgeted direct labour hours for the year } & 30,000 \
\text { Actual fixed overhead for August } & £ 24,000 \
\text { Actual variable overhead for August } & £ 10,000 \
\text { Direct labour hours worked in August } & 2,600 \
\text { Standard variable overhead cost per direct labour hour } & £ 4 \
\text { Standard direct labour hours allowed for August production } & 2,750
\end{array}$
-Refer to Figure 17-6. The standard rate for total overhead is
A)£14.
B)£13.
C)£10.
D)£4.

Question

Quizplus · Accepted Answer

The standard rate for total overhead is £14, calculated as follows:Standard total overhead rate = (Budgeted fixed overhead + (Budgeted direct labour hours × Standard variable overhead cost per direct labour hour)) / Budgeted direct labour hours= (£300,000 + (30,000 × £4)) / 30,000= £312,000 / 30,000= £14

Figure 17-6 -Refer to Figure 17-6