Mets Company Had the Following Information Budgeted Cost-Driver Activity Levels

question 139

Multiple Choice

Mets Company had the following information: $\begin{array}{ll}\text { Budgeted variable factory overhead } & \$ 66,000 \\ \text { Budgeted fixed factory overhead } & \$ 46,500 \\ & \\ \text { Actual variable factory overhead } & \$ 70,500 \\ \text { Actual fixed factory overhead } & \$ 55,500\end{array}$
Budgeted cost-driver activity levels:
$\begin{array}{lr}\text { Direct-labor hours } & 32,000 \\ \text { Direct-labor costs } & \$ 150,000 \\ \text { Machine hours } & 60,000 \\ \text { Production setups } & 15,000\end{array}$
Actual cost-driver activity level s:
$\begin{array}{lr}\text { Direct-labor hours } & 31,500 \\ \text { Direct-labor costs } & \$ 165,600 \\ \text { Machine hours } & 56,190 \\ \text { Production setups } & 14,280\end{array}$ The budgeted factory-overhead rate using direct-labor hours as the cost driver is _____.

• A)$4.00
• B)$3.57
• C)$3.52
• D)$3.81

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Definitions:

Division Performance

Evaluation of a specific division's operations within a larger company, focusing on its efficiency, productivity, and contribution to overall corporate goals.

Transfer Price

The price at which goods, services or intangible properties are traded between related entities within an organization.

Buying Division

A department within a company responsible for making purchases of goods and services needed by the organization.

Selling Division

A segment of a company specifically focused on sales and distribution of products or services.