Binegar Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labour-hours (DLHs). The company has two products, R58G and R09O, about which it has provided the following data:

-(Appendix 7A)The manufacturing overhead that would be applied to a unit of product R58G under the company's traditional costing system is closest to:
A) $6.74
B) $16.10
C) $22.84
D) $2.90

Question

Binegar Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labour-hours (DLHs) . The company has two products, R58G and R09O, about which it has provided the following data:

-(Appendix 7A) The manufacturing overhead that would be applied to a unit of product R58G under the company's traditional costing system is closest to:

-(Appendix 7A)The manufacturing overhead that would be applied to a unit of product R58G under the company's traditional costing system is closest to:
A) $6.74 
B) $16.10 
C) $22.84 
D) $2.90

Quizplus · Accepted Answer

The correct answer is A because the traditional costing system applies overhead based on direct labor hours, and product R58G has 0.4 direct labor hours. The overhead rate is $16.85 per direct labor hour, so the overhead applied to a unit of product R58G would be $16.85 x 0.4 = $6.74.

Binegar Manufacturing Corporation Has a Traditional Costing System in Which