The following data pertains to activity and costs for two months: Assuming that these activity levels are within the relevant range, the manufacturing overhead for July was:
A)$10,000
B)$11,700
C)$19,000
D)$9,300

Question

The following data pertains to activity and costs for two months:  Assuming that these activity levels are within the relevant range, the manufacturing overhead for July was:
A)$10,000 
B)$11,700 
C)$19,000 
D)$9,300

Quizplus · Accepted Answer

The manufacturing overhead for July can be calculated using the predetermined overhead rate (POR) and actual activity level. 
POR = Total Budgeted Manufacturing Overhead (TMOH) / Total Budgeted Activity Level 
POR = ($57,000 + $3,000) / 6,000 machine hours = $10 per machine hour 
Manufacturing Overhead for July = POR x Actual Activity Level 
Manufacturing Overhead for July = $10 x 1,170 machine hours = $11,700. Therefore, the correct answer is B.

The Following Data Pertains to Activity and Costs for Two