Tiara Industries Has the Following Information About Its Standards and Production

question 71

Multiple Choice

Tiara Industries has the following information about its standards and production activity for December: Actual manufacturing overhead cost incurred, $90,000
Variable manufacturing overhead cost @ $5.00 per unit produced
Fixed manufacturing overhead cost @ $3.00 per unit produced
($51,000/17,000 budgeted units)
Actual units produced, 5200
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)$85,000
• B)$90,000
• C)$136,000
• D)$41,600

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Definitions:

Shared Service Unit

An organizational unit that consolidates and provides specific services, such as HR or IT, to multiple departments within a company to improve efficiency and reduce costs.

Centralisation

The process of concentrating decision-making authority at higher levels of an organization, leading to centralized control.

Service Level Agreements

Formal contracts between service providers and customers that define the level of service expected from the provider.

Corporate Objectives

The defined goals and intentions of a corporation, aimed at guiding its overall direction and strategy for achieving success and growth.