The Tate Company Uses a Standard Costing System in Which

question 32

Multiple Choice

The Tate Company uses a standard costing system in which manufacturing overhead is applied to units of product on the basis of direct labour hours (DLHs) . The company recorded the following costs and activity for September:

$\begin{array}{l}\begin{array} { | l | r | } \hline \text { Cost: } & \\\hline \text { Actual Fixed Overhead Costs Incurred } & \$ 61,400 \\\hline \text { Volume Variance } & \$ 2,850 \text { unfavourable } \\\hline \text { Fixed Portion of the Predetermined Overhead Rate } & \$ 0.95 \text { per DLH } \\\hline\end{array}\\\\\begin{array} { | l | r | } \hline \text { Activity: } & \\\hline \text { Number of Units Completed } & 22,800 \\\hline \text { Standard Direct Labour Hours Allowed per Unit of Product } & 2.5 \text { DLHs } \\\hline \text { Denominator Activity } & 60,000 \text { DLHs } \\\hline\end{array}\end{array}$

-What was the amount of fixed overhead cost contained in the company's flexible budget for manufacturing overhead for September?

• A) $57,000.
• B) $58,550.
• C) $60,000.
• D) $61,400.

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