Match Point, Inc.has the following overhead standards: Variable overhead: 4 hours at $8 per hour Fixed overhead: 4 hours at $10 per hour The standards were based on a planned activity of 20,000 machine hours when 5,000 units were scheduled for production.Actual data follow. Variable overhead incurred: $167,750 Fixed overhead incurred: $210,000 Machine hours worked: 19,800 Actual units produced: 5,100 The amount of variable overhead that Match Point applied to production is:
A)$158,400.
B)$160,000.
C)$163,200.
D)$167,750.
E)None of the answers is correct.

Question

Quizplus · Accepted Answer

Variable overhead applied to production = (Actual machine hours worked/Actual units produced) x Variable overhead standard rate per hour
Variable overhead applied to production = (19,800/5,100) x $8 = $31,200
Fixed overhead applied to production = Fixed overhead standard rate per unit x Actual units produced
Fixed overhead applied to production = ($10 x 4) x 5,100 = $204,000
Total overhead applied to production = Variable overhead applied to production + Fixed overhead applied to production
Total overhead applied to production = $31,200 + $204,000 = $235,200
Since the question is asking for the amount of variable overhead applied to production, the answer is option C.