The Murray Corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours (DLHs). The company recorded the following activity and cost data for May:

-The amount of fixed manufacturing overhead cost that was used to compute the fixed component of the predetermined overhead rate was:
A)$54,135
B)$60,150
C)$59,465
D)$57,600

Question

The Murray Corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours (DLHs). The company recorded the following activity and cost data for May:

-The amount of fixed manufacturing overhead cost that was used to compute the fixed component of the predetermined overhead rate was:
A)$54,135 
B)$60,150 
C)$59,465 
D)$57,600

Quizplus · Accepted Answer

The fixed manufacturing overhead cost used to compute the fixed component of the predetermined overhead rate is typically based on budgeted or estimated figures, which in this case is $57,600.

The Murray Corporation Uses a Standard Cost System in Which