Everlast Co

question 108

Multiple Choice

Everlast Co.manufactures a variety of drill bits.The company's plant is partially automated.The budget for the year includes $432,000 payroll for 4,800 direct labor-hours.Listed below is cost driver information used in the product-costing system:
A current product order has the following requirements:
What is the total manufacturing overhead for the current product order if the firm assigns overhead costs based on machine hours?

• A)$9,960.
• B)$30,240.
• C)$43,741.
• D)$44,268.
• E)$109,352.

---

Definitions:

Outside Customers

Individuals or entities that are external to the organization and purchase its products or services, as opposed to internal stakeholders.

Idle Capacity

The portion of a company's resources or equipment that is not currently in use or producing goods, often leading to inefficiency and increased costs.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent, salaries, and insurance.

Outside Supplier

An outside supplier is a third party that provides goods or services to a company, which are outside of the company's internal production process.