ABC Company Listed the Following Data for the Current Year

question 67

Multiple Choice

ABC Company listed the following data for the current year: $\begin{array}{lr}\text { Budgeted factory overhead } & \$ 1,044,000 \\\text { Budgeted direct labor hours } & 69,600 \\\text { Budgeted machine hours } & 24,000 \\\text { Actual factory overhead } & 1,037,400 \\\text { Actual labor hours } & 72,600 \\\text { Actual machine hours } & 23,600\end{array}$ Assuming ABC applied overhead based on machine hours, the company's predetermined overhead rate for the year is:

• A)$43.95 per machine hour.
• B)$14.38 per machine hour.
• C)$43.50 per machine hour.
• D)$14.50 per machine hour.
• E)$14.28 per machine hour.

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Definitions:

Fixed Amounts

Specified quantities or volumes that do not vary or change over time, often used in the context of payments, investments, or allocations.

Total Product

The total quantity of goods or services produced by a firm or economy at a given time, a measure of overall output or production performance.

Profit-maximizing Output

The level of production at which a firm achieves the highest possible profit, determined where marginal cost equals marginal revenue.

Marginal Product

The additional output that is produced by adding one more unit of a specific input, holding all other inputs constant.