Estimated Production Overhead in the Machining Department Is $200,000 and Actual

question 18

Multiple Choice

Estimated production overhead in the machining department is $200,000 and actual overhead is $204,000 and estimated machine hours in the machining department are 4,000 hours and actual machine hours are 3,700 hours. Job 12B used 20 machine hours. Using normal costing what is the machining department overhead charged to job 12B?

• A) $1,081
• B) $50
• C) $54
• D) $1,000

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Definitions:

Contribution Margin

The amount of revenue remaining after deducting variable costs, which can then be used to cover fixed costs and contribute to profit.

Product Mix

The variety of products that a company produces or sells, considering the diversity in type, size, and quality.

Prime Cost

The sum of direct materials and direct labor costs associated with the production of goods.

Manufacturing Overhead

Indirect costs associated with manufacturing, such as utilities, maintenance, and factory equipment depreciation, not directly tied to specific units of product.