A manufacturer of playground equipment uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period:
-What is the predetermined fixed manufacturing overhead rate to the nearest cent?
A)$11.05 per MH
B)$11.19 per MH
C)$11.00 per MH
D)$10.86 per MH

Question

A manufacturer of playground equipment uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:  The following data pertain to operations for the most recent period: 
-What is the predetermined fixed manufacturing overhead rate to the nearest cent?
A)$11.05 per MH 
B)$11.19 per MH 
C)$11.00 per MH 
D)$10.86 per MH

Quizplus · Accepted Answer

Predetermined overhead rate = Budgeted total overhead F1F1F1S1F1F1F10 Denominator level of activity
= $86,190 F1F1F1S1F1F1F10 7,800 MHs = $11.05 per MH

A Manufacturer of Playground Equipment Uses a Standard Costing System