A Company Allocates Its Variable Factory Overhead Based on Direct

question 2

Multiple Choice

A company allocates its variable factory overhead based on direct labor hours.During the past three months,the actual direct labor hours and the total factory overhead allocated were as follows:
Based upon this information,monthly fixed factory overhead was:

• A)$30,000.
• B)$50,000.
• C)$46,667.
• D)$33,333. Using January and March: Unit variable cost = ($200,000 - $80,000)/(5,000 - 1,000)= $30 Fixed cost = $200,000 - (5,000 x $30)= $50,000.= $80,000 - (1,000 x $30)= $50,000

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