(Appendix 10A) A manufacturer of industrial equipment has a standard costing system based on standard direct labor-hours (DLHs) as 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) $151,993
B) $154,410
C) $157,200
D) $153,270

Question

(Appendix 10A) A manufacturer of industrial equipment has a standard costing system based on standard direct labor-hours (DLHs) as 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) $151,993 
B) $154,410 
C) $157,200 
D) $153,270

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total manufacturing overhead ÷ Denominator level of activity
= ($56,400 + $100,800) ÷ 8,000 DLHs
= $157,200 ÷ 8,000 DLHs
= $19.65 per DLH
Overhead applied = Predetermined overheard rate × Standard hours allowed for the actual output
= $19.65 per DLH × 7,735 DLHs
= $151,992.75

(Appendix 10A) a Manufacturer of Industrial Equipment Has a Standard