Question

A manufacturing company has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: Denominator level of activity 5,500 DLHs Overhead costs at the denominator activity level: Variable overhead cost $ 31,760 Fixed overhead cost $ 75,490 The following data pertain to operations for the most recent period: Actual hours 5,700 DLHs Standard hours allowed for the actual output 5,684 DLHs Actual total variable manufacturing overhead cost $ 30,940 Actual total fixed manufacturing overhead cost $ 97,480 The overhead applied to products during the period was closest to:

Multiple Choice $108,230 $110,838 $107,250 $111,150

Answer 1

Answer:

$110,838

Explanation:

Total estimated overhead                107.250

Divide by Total estimated activity 5.500

Predetermined overhead rate         19.5

Standard hours allowed for the actual output 5.684

X Predetermined overhead rate 19.5

Overhead applied to products 110.838

Option 2 $110,838 is correct