A furniture manufacturer 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)$74,460
B)$72,270
C)$67,408
D)$71,955

Question

A furniture manufacturer 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)$74,460 
B)$72,270 
C)$67,408 
D)$71,955

Quizplus · Accepted Answer

Predetermined overhead rate = Budgeted total overhead ÷ Denominator level of activity
= ($31,845 + $40,425)÷ 3,300 hours
= $72,270 ÷ 3,300 hours
= $21.90 per hour
Overhead applied = Predetermined overhead rate × Standards hours allowed for the actual output
= $21.90 per hour × 3,078 hours
= $67,408.20

A Furniture Manufacturer Uses a Standard Costing System in Which