The Owens Company Uses the Machine Hour Method of Applying

question 32

Multiple Choice

The Owens Company uses the machine hour method of applying factory overhead to production.The budgeted factory overhead last year was $200,000,and there were 40,000 machine hours budgeted.Job 84 was started and completed during the period.Direct materials costing $900 were incurred.Twenty-five direct labor hours were worked at a cost of $350,and 40 machine hours were incurred.What was the cost of Job 84?

• A)$1,450
• B)$1,375
• C)$1,250
• D)$1,290

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Definitions:

Industry Supply Curve

A graphical representation showing the total quantity of a good or service that producers in an industry are willing and able to supply at different price levels.

Marginal Cost Curves

A graphical representation showing how the cost of producing one more unit of a good varies with the quantity of the good produced.

AVC

Average Variable Cost, which is the total variable costs divided by the quantity of output produced.

Average Variable Cost

The total variable costs (costs that change with production volume) divided by the quantity of output produced.