JT Engineering's normal capacity is 20,000 direct labor hours. If JT's variable costs are $26,400 and its fixed costs are $14,900 when the company runs at normal capacity, what is its standard manufacturing overhead rate per unit? A. $2.07 B. $0.75 C. $1.32 D. $0.48

JT Engineering's normal capacity is 20,000 direct labor hours. If JT's variable costs are $26,400 and its fixed costs are $14,900 when the company runs at normal capacity, what is its standard manufacturing overhead rate per unit? A. $2.07 B. $0.75 C. $1.32 D. $0.48

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1PB: Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven...

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Question

What is its standard manufacturing overhead rate per unit?

JT Engineering's normal capacity is 20,000 direct labor hours. If JT's
variable costs are $26,400 and its fixed costs are $14,900 when the
company runs at normal capacity, what is its standard manufacturing
overhead rate per unit?
A. $2.07
B. $0.75
C. $1.32
D. $0.48

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