A Manufacturer of Industrial Equipment Has a Standard Costing System

question 86

Multiple Choice

A manufacturer of industrial equipment 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:
$\begin{array}{lrr} \text { Level of activity} &2,500 \mathrm{DLH}\\ \text {Overhead costs at the denominator activity level: } &\\ \text { Variable overhead cost } &\$8,500\\ \text { Fixed overhead cost} &\$34,625\\\end{array}$


The following data pertain to operations for the most recent period:
$\begin{array}{lrr} \text { Actual hours} &2,600\mathrm{DLHs} \\ \text {Standard hours allowed for the actual output } & 2,592 \mathrm{DLH}\\ \text { Actual total variable manufacturing overhead cost } &\$9,100\\ \text {Actual total fixed manufacturing overhead cost } &\$ 35,025\\\end{array}$


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How much overhead was applied to products during the period to the nearest dollar?

• A) $44,712.
• B) $44,125.
• C) $43,125.
• D) $44,850.

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Definitions:

Jeremy Bentham

A British philosopher, jurist, and social reformer regarded as the founder of modern utilitarianism.

Consequentialist Theorists

Philosophers who argue that the morality of an action is determined solely by its outcomes or consequences.

Theory of Hedonism

A philosophical theory that posits pleasure or happiness as the highest good and primary motivation for human action.

Ultimate Intrinsic Good

The highest value that is good in itself, sought not for the sake of anything else.