A manufacturing company uses a standard costing system in which standard machine-hours (MHs)is the measure of activity.Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: The overhead applied to products during the period was closest to:
A)$112,850
B)$113,415
C)$116,550
D)$110,889

Question

A manufacturing company uses a standard costing system in which standard machine-hours (MHs)is the measure of activity.Data from the company's flexible budget for manufacturing overhead are given below:  The following data pertain to operations for the most recent period:  The overhead applied to products during the period was closest to:
A)$112,850 
B)$113,415 
C)$116,550 
D)$110,889

Quizplus · Accepted Answer

Variable overhead + Fixed overhead = $35,075+ $77,775
Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $112,850 ÷ 6,100 MHs = $18.50 per MH
Overhead applied = Predetermined overheard rate × Standard hours allowed for the actual output
= $18.50 per MH × 5,994 MHs = $110,889

A Manufacturing Company Uses a Standard Costing System in Which