Crown Industries Has the Following Information About Its Standards and Production

question 227

Multiple Choice

Crown Industries has the following information about its standards and production activity for December:
Actual manufacturing overhead cost incurred,$92,500
Variable manufacturing overhead cost @ $3.25 per unit produced
Fixed manufacturing overhead cost @ $1.50 per unit produced
($22,500/15,000 budgeted units)
Actual units produced,5,400
Assume the allocation base for fixed overhead costs is the number of units to be produced.
How much are the standard overhead costs allocated to actual production?

• A)$48,750
• B)$92,500
• C)$71,250
• D)$25,650

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Definitions:

Deficiency

In real estate, the difference between the amount owed on a mortgage and the selling price of the property, if the property is sold in a foreclosure sale for less than the balance owed.

Conditional Sale Agreement

A legal contract where the sale of goods or property is contingent upon specific conditions being met, often relating to payment terms.

Bona Fide Purchaser

An individual who purchases something in good faith without notice of any prior claims, liens, or encumbrances.

Refrigerator

An appliance used for keeping food and drinks cold.