The Tate Company Uses a Standard Costing System in Which

question 5

Multiple Choice

The Tate Company uses a standard costing system in which manufacturing overhead is applied on the basis of standard direct labor-hours (DLHs) . The company recorded the following costs and activity for September:
-The amount of fixed manufacturing overhead cost applied to work in process during September was:

• A) $61,400
• B) $57,000
• C) $54,150
• D) $59,850

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Definitions:

Product Costs

Expenses directly tied to the creation of a product, including materials, labor, and manufacturing overhead.

Period Costs

Expenses that are not directly tied to the production of goods or services, such as selling, general, and administrative expenses, and are expensed in the period incurred.

Prime Costs

A calculation in cost accounting that signifies the sum of direct materials cost and direct labor cost.

Direct Materials

Specific raw materials that are traceable to the manufacturing process of a product, serving as an essential component in its production.