(Appendix 11A)A furniture manufacturer uses a standard costing system in which standard machine-hours (MHs)is 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)$74, 460
B)$72, 270
C)$67, 408
D)$71, 955

Question

(Appendix 11A)A furniture manufacturer uses a standard costing system in which standard machine-hours (MHs)is 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)$74, 460 
B)$72, 270 
C)$67, 408 
D)$71, 955

Quizplus · Accepted Answer

Predetermined overhead rate = Budgeted total overhead ÷ Denominator level of activity
= ($31, 845 + $40, 425)÷ 3, 300 hours
= $72, 270 ÷ 3, 300 hours
= $21.90 per hour
Overhead applied = Predetermined overhead rate × Standards hours allowed for the actual output
= $21.90 per hour × 3, 078 hours
= $67, 408.20

(Appendix 11A)A Furniture Manufacturer Uses a Standard Costing System in Which