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Howard Is Considering Two Different Denominators Levels: Theoretical Capacity of 2,300

Question 112

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Howard is considering two different denominators levels: theoretical capacity of 2,300 units and practical capacity of 1,900 units. With budgeted fixed MOH costs of $53,000, he thinks the actual production and sales for the two levels will be 2,100 units and 1,650 units, respectively. Calculate the budgeted fixed MOH rate, fixed MOH volume variance (amount and sign), and inventory cost per unit, assuming variable manufacturing costs of $65 per unit for both capacity levels. (Round Fixed MOH rate to the nearest cent. Fixed MOH volume variable round to the nearest dollar.)

Correct Answer:

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Theoretical capacity:
Fixed MOH rate = $...

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