Cost Accounting
Cost Accounting
15th Edition
ISBN: 9780133428834
Author: Horngren
Publisher: PEARSON
Question
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Chapter 9, Problem 9.35P

1.

To determine

The selling price.

Budgeted Fixed Manufacturing Overhead Rate:

The budgeted fixed manufacturing overhead rate is that rate at which the total budgeted fixed overhead costs are allocated.

Production Volume Variance:

The production volume variance is the difference between the budgeted amounts of fixed overhead costs less the fixed overhead cost allocated for the actual output produced.

2.

To determine

The new selling price and comment on the choice of budgeted production affect the selling price and competitive position.

3.

To determine

The selling price using practical capacity as the denominator level of capacity and the effect of this on the position of the company in the marketplace and the effect of the choice on the variance of production-volume.

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