A Particular Company Incurs Actual Overhead of $10 Per Unit

question 103

Multiple Choice

A particular company incurs actual overhead of $10 per unit produced. The company's budgeted (standard) overhead cost per unit produced is $9 per unit. Overhead is applied based on machine hours. If the company's actual machine hours worked was 1000, and standard hours allowed for units produced in the period was 1100 hours, what amount would be debited to work in process for overhead if the company used actual costing, normal costing and standard costing respectively?

• A) $11 000; $9 900; $9 000
• B) $11 000; $9 000; $9 900
• C) $10 000; $9 900; $9 000
• D) $10 000; $9 000; $9 900

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Definitions:

Productively Efficient

A situation where goods or services are produced at the lowest possible cost, maximizing the allocation of resources.

Opportunity Cost

The drawback of dismissing the next superior alternative during the decision process.

Real-Life Situations

Scenarios or events that occur outside theoretical or simulated environments, involving genuine contexts and conditions.

Economists

Professionals who study, develop, and apply theories and concepts from economics and write about economic policy.