Reddy Company Has the Following Cost Formulas for Overhead Based on These Cost Formulas,what Is the Expected Total Overhead

question 18

Multiple Choice

Reddy Company has the following cost formulas for overhead:
$\begin{array}{|l|r|}\hline \text { Cost } & \text { Cost Formula } \\\hline \text { Indirect Materials } & \$ 2,000 \text { plus } \$ 0.40 \text { per machine hour } \\\hline \text { Maintenance } & \$ 1,500 \text { plus } \$ 0.60 \text { per machine hour } \\\hline \text { Machine Setup } & \$ 0.30 \text { per machine hour } \\\hline \text { Utilities } & \$ 200 \text { plus } \$ 0.10 \text { per machine hour } \\\hline \text { Amortization } & \$ 800 \\\hline\end{array}$
Based on these cost formulas,what is the expected total overhead cost at 600 machine hours?

• A) $4,500.
• B) $5,200.
• C) $5,620.
• D) $5,340.

---

Definitions:

Current Assets

Assets that a company expects to convert into cash, sell, or consume within one year or during its operating cycle, whichever is longer.

Post-closing Trial Balance

A summary listing of all company accounts that remain after closing entries have been made, serving as a check that debits equal credits.

Owner's Capital Account

An equity account on the balance sheet representing the total amount of investment made by the owner(s) in the company, including profits retained in the business.

Balance Sheet Accounts

These are the financial accounts that appear on the balance sheet, including assets, liabilities, and equity accounts, representing the financial position of a company at a specific point in time.