Ferro Enterprises Uses a Standard Cost System in Which It

question 118

Multiple Choice

Ferro Enterprises uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor-hours.During the month of September, the company applied $52,000 in fixed manufacturing overhead cost to units of product.At the end of the month, manufacturing overhead was overapplied by $3,000.If there was no volume variance in September, then the budgeted fixed manufacturing overhead cost for the month was:

• A)$49,000
• B)$52,000
• C)$55,000
• D)$58,000

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Definitions:

Overvalued

Refers to a situation where the market price of an asset is considered to be higher than its intrinsic value.

Capital Balances

Amounts reflected in a company's financial records that represent the owner's investment in the business.

Cash Equals

Refers to the value of assets within a company that are in liquid form and can be readily converted to cash.

Share Income

Income earned by shareholders from their investments in a company, often referred to as dividends.