Figure 1
Harrison Co. produces two products, AB and XY. Information about the current period's production is as follows:
Harrison uses a plantwide rate of £4 per machine hour to apply overhead to production. Budgeted overhead was £392,000, but actual overhead was £376,000.
-Refer to Figure 1 above. What was Harrison Company's total cost to produce product AB?
A) £870,000
B) £910,000
C) £900,000
D) £890,000

Question

Quizplus · Accepted Answer

The total cost to produce product AB is the sum of the direct materials, direct labor, and overhead costs. The direct materials cost is £400,000, the direct labor cost is £200,000, and the overhead cost is £270,000 (4 per machine hour * 67,500 machine hours). Therefore, the total cost to produce product AB is £870,000.

Figure 1 Harrison Co. Produces Two Products, AB and XY. Information About