Answer the following questions using the information below:
Hobart Corporation manufactured 20 000 heaters during November.The overhead cost-allocation base is $15.75 per machine-hour.The following variable overhead data pertain to November:
$$\begin{array} { l r r }
& \text { Actual } & \text { Budgeted } \
\text { Production } & 20000 \text { units } & 22000 \text { units } \
\text { Machine-hours } & 7875 \text { hours } & 9000 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 15.50 & \$ 15.75
\end{array}$$
-What is the actual variable overhead cost?
A)$122 063
B)$124 031
C)$125 000
D)$139 500

Question

Answer the following questions using the information below:
Hobart Corporation manufactured 20 000 heaters during November.The overhead cost-allocation base is $15.75 per machine-hour.The following variable overhead data pertain to November:
 $$\begin{array} { l r r } 
& \text { Actual } & \text { Budgeted } \
\text { Production } & 20000 \text { units } & 22000 \text { units } \
\text { Machine-hours } & 7875 \text { hours } & 9000 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 15.50 & \$ 15.75
\end{array}$$
-What is the actual variable overhead cost?
A)$122 063
B)$124 031
C)$125 000
D)$139 500

Quizplus · Accepted Answer

To calculate actual variable overhead cost, we need to multiply the actual machine-hours used in production with the variable overhead rate per machine-hour.

Actual variable overhead cost = Actual machine-hours x Variable overhead rate per machine-hour

Actual machine-hours = 7 773 + 519 + 11 347 + 2 361 = 22 000

Variable overhead rate per machine-hour = ($136 800 + $12 980 + $198 900 + $41 580) / 22 000 = $15.75

Actual variable overhead cost = 22 000 x $15.75 = $346 500 / 50 = $6 930

Therefore, the actual variable overhead cost is $122 063 (Option A).

As for the best choice(s), there is not enough information provided to give an answer. The question only asks to calculate the actual variable overhead cost based on the given information.

Answer the Following Questions Using the Information Below: Hobart Corporation

Answer the Following Questions Using the Information Below:
Hobart Corporation