Carattini Incorporated makes a single product--an electrical motor used in many long-haul trucks.The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period.Data concerning the most recent year appear below: The total amount of manufacturing overhead applied is closest to:
A)$340,376
B)$342,000
C)$312,900
D)$372,000

Question

Carattini Incorporated makes a single product--an electrical motor used in many long-haul trucks.The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period.Data concerning the most recent year appear below:  The total amount of manufacturing overhead applied is closest to:
A)$340,376 
B)$342,000 
C)$312,900 
D)$372,000

Quizplus · Accepted Answer

Manufacturing overhead applied = Standard overhead rate x Actual labor hours
Standard overhead rate = Budgeted overhead cost / Budgeted labor hours
= $326,000 / 26,000 hours
= $12.54 per hour

Manufacturing overhead applied = $12.54 x 27,250 hours
= $342,045

The closest answer is B) $342,000. 11ea7998_5d4b_5793_911b_fba5237ae690_TB2627_00_TB2627_00

Carattini Incorporated Makes a Single Product--An Electrical Motor Used in Many