The Adlake Corporation Makes and Sells a Single Product and Uses

question 23

Multiple Choice

The Adlake Corporation makes and sells a single product and uses a standard cost system.During October,the company budgeted $300,000 in manufacturing overhead cost at a denominator activity of 20,000 machine-hours.At standard,each unit of finished product requires 5 machine-hours.The following cost and activity were recorded during October: The amount of overhead cost that the company applied to work in process for October was:

• A)$279,300
• B)$291,330
• C)$294,000
• D)$285,000

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Definitions:

Margin

The difference between the selling price of a product and the cost of producing it, often expressed as a percentage of the selling price.

Optimal Quantity

The quantity of a good or service that maximizes efficiency or utility, often where marginal cost meets marginal benefit.

Sweatshirt Production

The process of creating sweatshirts, involving the selection of materials, design, and manufacturing.

MB < MC

This indicates a scenario where the marginal benefit of producing or consuming one more unit of a good is less than the marginal cost of producing that additional unit.