Miami Fashions uses standard costs for their manufacturing division.From the following data,calculate the fixed overhead allocated to production based on direct labor hours (DLHr). $$\begin{array} { | l | r | }
\hline \text { Actual fixed overhead } & \$ 34,000 \
\hline \text { Budgeted fixed overhead } & \$ 21,000 \
\hline \text { Standard overhead allocation rate } & \$ 9 \
\hline \text { Standard direct labor hours per unit } & 3 \text { DLHr } \
\hline \text { Actual output } & 2,000 \text { units } \
\hline
\end{array}$$

Question

Miami Fashions uses standard costs for their manufacturing division.From the following data,calculate the fixed overhead allocated to production based on direct labor hours (DLHr). $$\begin{array} { | l | r | } 
\hline \text { Actual fixed overhead } & \$ 34,000 \
\hline \text { Budgeted fixed overhead } & \$ 21,000 \
\hline \text { Standard overhead allocation rate } & \$ 9 \
\hline \text { Standard direct labor hours per unit } & 3 \text { DLHr } \
\hline \text { Actual output } & 2,000 \text { units } \
\hline
\end{array}$$

Quizplus · Accepted Answer

The fixed overhead allocated to production is calculated using the standard overhead allocation rate and the total standard direct labor hours for the actual output. The standard overhead allocation rate is $9 per DLHr, and the standard direct labor hours per unit is 3 DLHr. For an actual output of 2,000 units, the total standard direct labor hours are $2,000 \text{ units} \times 3 \text{ DLHr/unit} = 6,000 \text{ DLHr}$. Therefore, the fixed overhead allocated to production is $6,000 \text{ DLHr} \times \$9/\text{DLHr} = \$54,000$.

Miami Fashions Uses Standard Costs for Their Manufacturing Division A) $21,000 B) $54,000 C) $34,000 D) $18,000

Miami Fashions Uses Standard Costs for Their Manufacturing Division A) $21,000
B) $54,000
C) $34,000
D) $18,000