What was the amount of fixed overhead released for the month under absorption costing?
Refer To: 08-04
A) $0.
B) $2,100.
C) $2,800.
D) $61,600.

Question

Quizplus · Accepted Answer

Fixed overhead is applied to units produced based on the predetermined overhead rate. The amount of fixed overhead released for the month under absorption costing is equal to the amount of fixed overhead applied to the units produced during the month. In this case, the predetermined overhead rate is $1.40 per unit, and 2,000 units were produced during the month. Therefore, the amount of fixed overhead released for the month under absorption costing is $1.40 x 2,000 = $2,800.

What Was the Amount of Fixed Overhead Released for the Month