Litchfield Industries Gathered the Following Information for the Month Ended

question 219

Multiple Choice

Litchfield Industries gathered the following information for the month ended June 31: The static budget volume is 5,500 units:
Overhead flexible budget:
Actual production was 12,000 units. Actual overhead costs were $28,000 for variable costs and $37,000 for fixed costs. Actual machine hours worked were 16,000 hours.
What is the standard variable overhead rate per machine hour?

• A)$3.50
• B)$4.31
• C)$2.47
• D)$3.86

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Definitions:

Observed Values

The actual data or outcomes that have been collected or measured in a study.

Confidence Interval

A range of values, derived from sample statistics, that is likely to contain the value of an unknown population parameter.

Chi-square

A statistical test used to examine differences with categorical variables, assessing how likely observed frequencies are due to chance.

Variance

Variance is a statistical measure that indicates the spread or dispersion of a set of data points or distribution around the mean.