The Rowe Company Uses a Standard Cost System in Which

question 23

Multiple Choice

The Rowe Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of machine-hours. During January, the company budgeted to incur £225,000 in manufacturing overhead cost and to operate at a denominator activity level of 25,000 machine-hours. At standard, each unit of finished product requires 3 machine-hours. The following cost and activity were recorded during January. $\begin{array}{ll}\text { Total actual manufacturing ov erhead cost incurred } & £ 217,750 \\\text { Units of product completed } & 8,000 \\\text { Actual machine-hours worked } & 23,000\end{array}$ The amount of overhead cost that the company applied to Work in Process for January was

• A)£217,750.
• B)£225,000.
• C)£221,600.
• D)£216,000.

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Definitions:

Cash Dividend

Cash payments issued to a certain category of stockholders out of a firm's profits, as resolved by the board of directors.

Shares Issued

The total number of shares that have been allocated and distributed to shareholders by a company, representing ownership in the company.

Stock Split

A corporate action that increases the number of shares in a company by dividing each share, which in turn reduces its price, making the stock more accessible to investors.

Stock Dividend

A dividend payment made in the form of additional shares rather than a cash payout, increasing the number of shares owned by shareholders.