Overhead cost is applied to units based on direct labour hours.For April,total overhead cost was budgeted at $80,000 based on a denominator activity level of 20,000 direct labour hours for the month.The standard cost card indicates that each unit of finished product requires 2 direct labour hours.The following data are available for April's activity:
What was the amount of total overhead cost applied to production for the month of April?
A) $76,000.
B) $78,000.
C) $79,500.
D) $80,000.

Question

Overhead cost is applied to units based on direct labour hours.For April,total overhead cost was budgeted at $80,000 based on a denominator activity level of 20,000 direct labour hours for the month.The standard cost card indicates that each unit of finished product requires 2 direct labour hours.The following data are available for April's activity: 
What was the amount of total overhead cost applied to production for the month of April?
A) $76,000. 
B) $78,000. 
C) $79,500. 
D) $80,000.

Quizplus · Accepted Answer

The Answer of Overhead cost is applied to units based on direct labour hours.For April,total overhead cost was budgeted at $80,000 based on a denominator activity level of 20,000 direct labour hours for the month.The standard cost card indicates that each unit of finished product requires 2 direct labour hours.The following data are available for April's activity: 
What was the amount of total overhead cost applied to production for the month of April?
A) $76,000. 
B) $78,000. 
C) $79,500. 
D) $80,000.

Overhead Cost Is Applied to Units Based on Direct Labour