ata Systems allocates manufacturing overhead based on machine hours. Each connector should require 10 machine hours. According to the static budget, Kata expected to incur the following: 1,000 machine hours per month (100 connectors × 10 machine hours per connector) $8,500 in variable manufacturing overhead costs $9,450 in fixed manufacturing overhead costs During August, Kata actually used 800 machine hours to make 130 connectors and spent $5,200 in variable manufacturing costs and $7,800 in fixed manufacturing overhead costs. Kata's standard variable manufacturing overhead allocation rate is A. $17.95 per machine hour. B. $9.45 per machine hour. C. $10.63 per machine hour. D. $8.50 per machine hour.
ata Systems allocates manufacturing overhead based on machine hours. Each connector should require 10 machine hours. According to the static budget, Kata expected to incur the following: 1,000 machine hours per month (100 connectors × 10 machine hours per connector) $8,500 in variable manufacturing overhead costs $9,450 in fixed manufacturing overhead costs During August, Kata actually used 800 machine hours to make 130 connectors and spent $5,200 in variable manufacturing costs and $7,800 in fixed manufacturing overhead costs. Kata's standard variable manufacturing overhead allocation rate is A. $17.95 per machine hour. B. $9.45 per machine hour. C. $10.63 per machine hour. D. $8.50 per machine hour.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
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A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Kata Systems allocates manufacturing overhead based on machine hours. Each connector should require 10 machine hours. According to the static budget, Kata expected to incur the following:
|
1,000 machine hours per month (100 connectors × 10 machine hours per connector)
|
|
$8,500 in variable
|
|
$9,450 in fixed manufacturing overhead costs
|
During August, Kata actually used 800 machine hours to make 130 connectors and spent $5,200 in variable manufacturing costs and
$7,800 in fixed manufacturing overhead costs. Kata's standard variable manufacturing overhead allocation rate is
A.
$17.95
per machine hour.B.
$9.45
per machine hour.C.
$10.63
per machine hour.D.
$8.50
per machine hour.Expert Solution
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