(Appendix 10A) A manufacturer of playground equipment 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 fixed manufacturing overhead applied to products during the period is closest to:
A) $58,870
B) $61,083
C) $61,915
D) $58,320

Question

(Appendix 10A) A manufacturer of playground equipment 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 fixed manufacturing overhead applied to products during the period is closest to:
A) $58,870 
B) $61,083 
C) $61,915 
D) $58,320

Quizplus · Accepted Answer

Predetermined overhead rate = Budgeted total overhead ÷ Denominator level of activity
= $58,870 ÷ 5,800 MHs = $10.15 per MH
Fixed manufacturing overhead applied = Predetermined overheard rate × Standard hours allowed for the actual output = $10.15 per MH × 6,018 MHs = $61,082.70

(Appendix 10A) a Manufacturer of Playground Equipment Has a Standard