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) $21,600
B) $20,000
C) $22,000
D) $19,500

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) $21,600 
B) $20,000 
C) $22,000 
D) $19,500

Quizplus · Accepted Answer

Direct materials per unit = $17,000 ÷ 10,000 units = $1.70 per unit
Total direct materials cost in July = $1.70 per unit × 11,000 units = $18,700
Fixed factory rent = $21,000 (given)
Total cost = Direct materials + Fixed factory rent + Manufacturing overhead
$61,300 = $18,700 + $21,000 + Manufacturing overhead
Manufacturing overhead = $61,300 - ($18,700 + $21,000)
= $61,300 - $39,700
= $21,600

The Following Data Pertains to Activity and Costs for Two