Garrity Corporation Bases Its Predetermined Overhead Rate on Variable Manufacturing

question 104

Multiple Choice

Garrity Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $6.80 per machine-hour and fixed manufacturing overhead cost of $503,272 per period.If the denominator level of activity is 7,600 machine-hours, the variable element in the predetermined overhead rate would be:

• A)$6.80
• B)$72.16
• C)$66.22
• D)$73.02

Analyze the effect of actual activity levels on budgeted amounts.

Understand the standard number of machine-hours allowed for production.

Understand and calculate variable overhead efficiency variance.

Prepare flexible budgets for different activity levels and understand its components.

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Definitions:

Self-Fulfilling Prophecy

An expectation that helps bring about what it predicts.

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Resocialization

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