A manufacturing company has a standard costing system based on direct labour-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:$\begin{array}{lrr}
\text { Denominator level of activity } &3,700&\text { DLHs }\
\text { Overhead costs at the denominator activity level: } &\
\text { Variable overhead cost } &£ 28,490\
\text { Fixed owerhead cost } &£ 47,545\
\text { The following data pertain to operations for the most recent period:} &\
\text { Actual hours } &3,900&\text { DLHs }\
\text { Standard hours 3,900allowed for the actual output } &3,850&\text { DLHs }\
\text { Actual total variable overhead cost } &£ 29,445\
\text {Actual total fixed overhead cost } &£47,995 \

\end{array}$

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How much overhead was applied to products during the period to the nearest pound

A)£79,118
B)£76,035
C)£77,440
D)£80,145

Question

A manufacturing company has a standard costing system based on direct labour-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:$\begin{array}{lrr}
  \text { Denominator level of activity } &3,700&\text { DLHs }\
 \text { Overhead costs at the denominator activity level: } &\
 \text { Variable overhead cost } &£ 28,490\
 \text { Fixed owerhead cost } &£ 47,545\
 \text {  The following data pertain to operations for the most recent period:} &\
 \text { Actual hours } &3,900&\text { DLHs }\
 \text { Standard hours 3,900allowed for the actual output  } &3,850&\text { DLHs }\
 \text { Actual total variable overhead cost  } &£ 29,445\
 \text {Actual total fixed overhead cost  } &£47,995 \

\end{array}$

-
How much overhead was applied to products during the period to the nearest pound

A)£79,118
B)£76,035
C)£77,440
D)£80,145

Quizplus · Accepted Answer

The overhead applied to products during the period is the sum of the variable overhead applied and the fixed overhead applied. The variable overhead applied is the actual variable overhead cost of £29,445. The fixed overhead applied is the budgeted fixed overhead cost of £47,545. Therefore, the total overhead applied to products during the period is £29,445 + £47,545 = £77,440.

A Manufacturing Company Has a Standard Costing System Based on Direct