The standard fixed factory overhead rate is based on 100% capacity of 135,000 machine hours for Interile Inc.The standard costs and the actual costs of factory overhead for the production of 32,000 units during March were as follows:
A)$2.00
B)$2.50
C)$3.00
D)$3.50

Question

Quizplus · Accepted Answer

The standard fixed factory overhead rate is calculated by dividing the total fixed factory overhead by the total machine hours at 100% capacity. If the total fixed factory overhead is $270,000 (135,000 machine hours x $2.00), then the rate is $2.00 per machine hour.

The Standard Fixed Factory Overhead Rate Is Based on 100