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 XY?
A) £650,000
B) £910,000
C) £900,000
D) £890,000

Question

Quizplus · Accepted Answer

To calculate the total cost to produce product XY, we need to sum the direct materials, direct labor, and applied overhead costs. The applied overhead cost is calculated using the plantwide rate of £4 per machine hour. For product XY, the direct materials cost is £400,000, the direct labor cost is £250,000, and the machine hours are 60,000. The applied overhead for XY is 60,000 hours * £4/hour = £240,000. Therefore, the total cost is £400,000 (direct materials) + £250,000 (direct labor) + £240,000 (applied overhead) = £890,000.

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