The fixed manufacturing overhead cost applied to products was:

A) $31,960
B) $37,250
C) $38,352
D) $39,846

Question

The fixed manufacturing overhead cost applied to products was:A) $31,960B) $37,250C) $38,352D) $39,846

Robert Haughton · Accepted Answer

Final Answer : C, Explanation :  The fixed manufacturing overhead cost applied to products can be calculated as follows:Budgeted fixed manufacturing overhead = $45,000Budgeted direct labor hours = 3,600 hoursFixed manufacturing overhead rate = $45,000 / 3,600 hours = $12.50 per direct labor hourActual direct labor hours used = 3,068 hoursApplied fixed manufacturing overhead cost = $12.50 per direct labor hour x 3,068 hours = $38,352. Therefore, the best choice is C. Budget variance = Actual fixed overhead - Budgeted fixed overhead$1,300 U = $38,900 - Budgeted fixed overhead$1,300 = $38,900 - Budgeted fixed overheadBudgeted fixed overhead = $38,900 - $1,300Budgeted fixed overhead = $37,600Fixed component of the predetermined overhead rate = $37,600 ÷ 20,000 DLHs = $1.88 per DLHFixed manufacturing overhead cost applied = $1.88 per DLH × 1.2 DLHs per unit × 17,000 units = $38,352

The fixed manufacturing overhead cost applied to products was:

A) $31,960
B) $37,250
C) $38,352
D) $39,846

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