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:

Contract Interest Rate

The interest rate specified in a loan or bond agreement, representing the cost of borrowing or the rate of return promised to lenders.

Troubled Debt Restructuring

A process where the terms of a debt are modified due to the debtor's financial difficulties to provide relief.

Stated Interest Rate

The interest rate that is agreed upon in the loan document, which does not account for compounding.

Real Estate

Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water.