Using the Following Accounts and an Overhead Rate of 80

question 67

Multiple Choice

Using the following accounts and an overhead rate of 80% of direct labor cost,determine the amount of applied overhead.

• A) $135,000
• B) $75,000
• C) $60,000
• D) $101,000
• E) $17,000

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Definitions:

Labour Efficiency Variance

The difference between the actual labor hours spent on production and the expected (or standard) labor hours, multiplied by the standard labor rate.

Actual Total Labour Cost

The real amount spent on wages and benefits for employees involved in the production process during a specific period.

Standard Labour Rate

The pre-established rate per hour that a company expects to pay for direct labor.

Actual Units

The real quantity of items produced, sold, or consumed, as opposed to planned or theoretical quantities.