A Manufacturer of Industrial Equipment Has a Standard Costing System

question 225

Multiple Choice

A manufacturer of industrial equipment has a standard costing system based on direct labour hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
$\begin{array}{|l|r|}\hline \text { Denominator Level of Activity } & 8,000 \mathrm{DLHs} \\\hline \text { Overhead Costs at the Denominator Activity Level: } & \\\hline \text { Variable Overhead Cost } & \$ 56,400 \\\hline \text { Fixed Overhead Cost } & \$ 100,800 \\\hline\end{array}$
The following data pertain to operations for the most recent period:
$\begin{array}{|l|r|}\hline \text { Actual Hours } & 7,800 \mathrm{DLHs} \\\hline \text { Standard Hours Allowed for the Actual Output } & 7,735 \mathrm{DLHs} \\\hline \text { Actual Total Variable Overhead Cost } & \$ 54,210 \\\hline \text { Actual Total Fixed Overhead Cost } & \$ 100,200 \\\hline\end{array}$
-What was the total predetermined overhead rate,rounded to the nearest cent?

• A) $19.30.
• B) $19.65.
• C) $19.80.
• D) $20.15.

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Definitions:

Naum Gabo's Column

An artistic sculpture by Naum Gabo, a pioneer of constructivism, known for its use of abstract geometric forms in representing thematic concepts.

Constructivist

Constructivism is an artistic and architectural philosophy that originated in Russia in the early 20th century, emphasizing abstract, geometric forms and the use of modern materials to reflect modern social functions and values.

Sculptural Style

The distinct manner or technique in which sculptures are fashioned, often indicative of a specific period, culture, or artist.

Readymades

Artistic works created by selecting and designating ordinary, manufactured objects as art, a concept most associated with Marcel Duchamp.