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Fact Pattern: Dori Castings, a job-order shop, uses a full-absorption, standard-cost system to account for its production costs. The O/H costs are applied on a direct-labor-hour basis.
The amount of fixed factory O/H that Dori will apply to finished production is the:_______.
A. Standard allowed direct labor hours for the actual units of finished output times the standard fixed factory O/H rate per direct labor hour.
B. Actual fixed factory O/H cost per direct labor hour times the standard allowed direct labor hours.
C. Actual direct labor hours times the standard fixed factory O/H rate per direct labor hour.
D. Standard units of output for the actual direct labor hours worked times the standard fixed factory O/H rate per unit of output.

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Answer:

A)Standard allowed direct labor hours for the actual units of finished output times the standard fixed factory O/H rate per direct labor hour.

Explanation:

Production cost are all cost that producer used to produce his/her goods, it could be labor cost , and other expenses.bit can be calculated by dividing the total unit produced by the cost . Or the summation of all cost such direct labor, overhead cost.

Hence, The amount of fixed factory O/H that Dori will apply to finished production is the: ""Standard allowed direct labor hours for the actual units of finished output times the standard fixed factory O/H rate per direct labor hour."" Which is option A

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