Overhead Cost Is Applied to Units Based on Direct Labour

question 98

Multiple Choice

Overhead cost is applied to units based on direct labour hours.For April,total overhead cost was budgeted at $80,000 based on a denominator activity level of 20,000 direct labour hours for the month.The standard cost card indicates that each unit of finished product requires 2 direct labour hours.The following data are available for April's activity:
$\begin{array}{|l|r|}\hline \text { Number of Units Produced } & \$ 9,500 \\\hline \text { Direct Labour Hours Worked } & \$ 19,500 \\\hline \text { Actual Total Overhead Cost Incurred } & \$ 79,500 \\\hline\end{array}$
What was the amount of total overhead cost applied to production for the month of April?

• A) $76,000.
• B) $78,000.
• C) $79,500.
• D) $80,000.

---

Definitions:

Intellect

The faculty of reasoning, understanding, and thinking critically and analytically.

Control One's Emotions

The ability to manage and regulate emotional responses in various situations.

Common Resources

Resources that are available to all members of a society but have limited availability, leading to potential overuse and depletion.

Cultural Differences

The variation in the norms, values, beliefs, and practices that exist among groups of people from different backgrounds.