Dodge Company had the following information:
$\begin{array} { l }
\text {Budgeted factory overhead costs }&\$ 90,000\
\text {Actual factory overhead costs }&\$82,000 \
\text { Budgeted machine hours}&40,000 \ \text { Actual machine hours}&35,500 \
\end{array}$

Assume machine hours are the cost driver of factory overhead costs.The budgeted factory overhead rate is ________.
A) $2.025 per machine hour
B) $2.05 per machine hour
C) $2.25 per machine hour
D) $2.875 per machine hour

Question

Dodge Company had the following information:
$\begin{array} { l  }
 \text {Budgeted factory overhead costs }&\$ 90,000\
 \text {Actual factory overhead costs }&\$82,000 \
 \text { Budgeted machine hours}&40,000 \ \text { Actual machine hours}&35,500 \
\end{array}$

Assume machine hours are the cost driver of factory overhead costs.The budgeted factory overhead rate is ________.
A) $2.025 per machine hour
B) $2.05 per machine hour
C) $2.25 per machine hour
D) $2.875 per machine hour

Quizplus · Accepted Answer

The budgeted factory overhead rate is calculated by dividing the budgeted factory overhead costs by the budgeted machine hours: $90,000 / 40,000 = $2.25 per machine hour.

Dodge Company Had the Following Information Assume Machine Hours Are the Cost Driver of Factory Overhead