The Murray Company Makes and Sells a Single Product -What Was the Amount of Fixed Manufacturing Overhead Cost Applied

question 19

Multiple Choice

The Murray Company makes and sells a single product. The company recorded the following activity and cost data for May:
$\begin{array}{l}\begin{array} { | l | r | } \hline \text { Number of Units Completed } & 45,000 \text { units } \\\hline \text { Standard Direct Labour Hours Allowed per Unit of Product } & 1.5 \text { DLHS } \\\hline \text { Budgeted Direct Labour Hours (denominator activity) } & 72,000 \text { DLHS } \\\hline \text { Actual Fixed Overhead Costs Incurred } & \$ 66,000 \\\hline \text { Volume Variance } & \$ 4,4275 \text { unfavourable } \\\hline\end{array}\\\text { The fixed portion of the predetermined overhead rate is } \$ 0.95 \text { per direct labour hour. }\end{array}$



-What was the amount of fixed manufacturing overhead cost applied to work in process during May?

• A) $42,750.
• B) $61,725.
• C) $62,700.
• D) $64,125.

---

Definitions:

Total Fixed Costs

The sum of all costs that do not change with the level of output produced, such as rent or salaries.

Average Grade

The middle value of grades assigned in academic performance, calculated by averaging the grades of all subjects or courses taken.

Test Average

The mean score obtained by an individual or group on a series of examinations or tests.

Average Variable Cost

The variable cost per unit of output.