The following data pertains to activity and costs for two months: Assuming that these activity levels are within the relevant range,the manufacturing overhead for July was:
A)$10,000
B)$11,700
C)$19,000
D)$9,300

Question

The following data pertains to activity and costs for two months:  Assuming that these activity levels are within the relevant range,the manufacturing overhead for July was:
A)$10,000 
B)$11,700 
C)$19,000 
D)$9,300

Quizplus · Accepted Answer

Direct materials per unit = $16,000 ÷ 10,000 units = $1.60 per unit
Total direct materials cost in July = $1.60 per unit × 12,000 units = $19,200
Fixed factory rent = $12,000 (given)
Total cost = Direct materials + Fixed factory rent + Manufacturing overhead
$42,900 = $19,200 + $12,000 + Manufacturing overhead
Manufacturing overhead = $70,000 - ($19,200 + $12,000)
= $42,900 - $31,200 = $11,700

The Following Data Pertains to Activity and Costs for Two