Hogle Manufacturing Uses a Standard Costing System

question 32

Multiple Choice

Hogle Manufacturing uses a standard costing system. The standard time to produce one unit is 4 hours, and normal production is 3,000 units monthly. Overhead costs were estimated to be $135,000. The standard variable overhead rate is $5 per machine hour. During April the following results were recorded: The total overhead allocated was

• A) $135,000
• B) $139,500
• C) $141,500
• D) $137,000

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Definitions:

Unit Cost

The cost incurred to produce, acquire, or distribute one unit of a product or service.

Inventoriable Costs

Costs that are included in the value of inventory and recognized as cost of goods sold when the inventory is sold.

Cost of Goods

The immediate expenses incurred in the production of a company's sold goods, covering both the cost of labor and materials used.

Consigned Goods

Goods that are given to a third party to sell, but ownership remains with the supplier until sold.