Rocky Company had the following information:
$\begin{array}{ll}
\text { Budgeted factory overhead costs } & \$ 90,000 \
\text { Actual factory overhead costs } & \$ 80,000 \
\text { Budgeted production setups } & 12,000 \
\text { Actual production setups } & 11,500
\end{array}$
Assume production setups are the cost driver for factory overhead costs.The budgeted factory overhead rate is ________.
A) $6.25 per setup
B) $6.52 per setup
C) $6.78 per setup
D) $7.50 per setup

Question

Quizplus · Accepted Answer

The budgeted factory overhead rate is calculated by dividing the budgeted factory overhead costs by the budgeted production setups: $90,000 / 12,000 setups = $7.50 per setup.

Rocky Company Had the Following Information Assume Production Setups Are the Cost Driver for Factory Overhead