(Appendix 11A)The Murray Corporation Makes and Sells a Single Product

question 64

Multiple Choice

(Appendix 11A) The Murray Corporation makes and sells a single product.The company recorded the following activity and cost data for May: The fixed component of the predetermined overhead rate is $0.95 per direct labor-hour. The amount of fixed manufacturing overhead cost applied to work in process during May was:

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

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Definitions:

Direct Manufacturing Cost

Costs directly associated with the production of goods, including raw materials and labor.

Relevant Range

The range of activity within which assumptions about the behavior of costs are valid.

Direct Costs

Costs that can be directly attributing to the production of specific goods or services, such as raw materials and labor.

Merchandising Company

A type of business that purchases goods in a ready-to-sell condition and earns income by selling these goods to end consumers.