Precision Parts Manufacturing allocates manufacturing overhead based on machine hours. Each component is expected to require 6 machine hours. According to the static budget, Precision Parts expected to incur the following: 1. 600 machine hours per month (components * 6 machine hours per component). 2. $7,800 in variable manufacturing overhead costs. 3. $12,000 in fixed manufacturing overhead costs. During July, Precision Parts actually used 550 machine hours to make 100 components, spending $7,200 in variable manufacturing overhead costs and $12,100 in fixed manufacturing overhead costs. Precision Parts' standard variable manufacturing overhead allocation rate is: a. $13 per machine hour b. $12.50 per machine hour c. $14.67 per machine hour d. $11.25 per machine hour

Precision Parts Manufacturing allocates manufacturing overhead based on machine hours. Each component is expected to require 6 machine hours. According to the static budget, Precision Parts expected to incur the following: 1. 600 machine hours per month (components * 6 machine hours per component). 2. $7,800 in variable manufacturing overhead costs. 3. $12,000 in fixed manufacturing overhead costs. During July, Precision Parts actually used 550 machine hours to make 100 components, spending $7,200 in variable manufacturing overhead costs and $12,100 in fixed manufacturing overhead costs. Precision Parts' standard variable manufacturing overhead allocation rate is: a. $13 per machine hour b. $12.50 per machine hour c. $14.67 per machine hour d. $11.25 per machine hour

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 13CE: Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead...

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