The Amount of Overhead Applied for Activity 3 During the
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question 7

Multiple Choice

$$\begin{array}{l}\begin{array} { | l | l | l | } \hline & \begin{array} { l } \text { Estimated } \\\text { Overhead } \\\text { Cost }\end{array} & \text { Expected Activity } \\\hline \text { Activity 1 } & \$ 34,300 & 1,400 \\\hline \text { Activity 2 } & \$ 20,520 & 1,800 \\\hline \text { Activity 3 } & \$ 36,112 & 1,600 \\\hline\end{array}\\\text { Actual activity for the current year was as follows: }\\\begin{array} { | l | l | } \hline & \text { Actual Activity } \\\hline \text { Activity 1 } & 1,415 \\\hline \text { Activity 2 } & 1,805 \\\hline \text { Activity 3 } & 1,585 \\\hline\end{array}\end{array}$$ The amount of overhead applied for Activity 3 during the year was closest to

• A)$36,107.00.
• B)$30,026.50.
• C)$36,112.00.
• D)$35,773.45.

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Definitions:

Trade Discount

A reduction from the list price granted by a seller to a buyer, often based on volume or trade practices.

List Price

The initial sales price of a product or service before any discounts or allowances are applied.

Cash Discount

A reduction in the invoice amount offered by a seller to a buyer as an incentive for early payment, typically within specific terms.

Sales Returns and Allowances

Reductions in sales revenue for returned goods or for allowances given to customers for defective or unsatisfactory merchandise.