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Calculating the Fixed Overhead Cost

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Question: A manufacturer of playground equipment has a standard costing system based on standard machine-hours (MHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:

Denominator level of activity 8,800 MHs
Fixed overhead cost $72,248

The following data pertain to operations for the most recent period:
Actual hours 8,590 MHs
Standard hours allowed for the actual output 8,656 MHs
Actual total fixed overhead cost $72,370

How much fixed overhead was applied to products during the period to the nearest dollar? (Round off your answer to the nearest whole dollar).

$71,326
$71,066
$70,524
$71,226

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This solution is comprised of a very concise answer to solve for how much fixed overhead was applied to products during the period to the nearest dollar. All calculations are included and are rather brief in nature.

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