Litchfield Industries gathered the following information for the month ended June 31: The static budget volume...
Litchfield Industries gathered the following information for the month ended June 31:
The static budget volume is 5000 units:
Overhead flexible budget:
|
Number of units |
8,000 |
9,000 |
10,000 |
|
Standard machine hours |
8,800 |
9,900 |
11,000 |
|
Budgeted variable overhead costs: |
$26,400 |
$29,700 |
$33,000 |
|
Budgeted fixed overhead costs: |
$13,750 |
$13,750 |
$13,750 |
Actual production was 14,000 units. Actual overhead costs were $27,000 for variable costs and $38,000 for fixed costs. Actual machine hours worked were 17,000 hours.
What is the standard variable overhead rate per machine hour?
A.
$1.39
B.
$3.00
C.
$2.16
D.
$3.30
Homework Answers
B. $3.00
Standard variable overhead rate per machine hour = $29,700/9,900 = $3.00
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