Litchfield Industries Gathered the Following Information for the Month Ended

question 38

Multiple Choice

Litchfield Industries gathered the following information for the month ended June 31: The static budget volume is 5000 units:
Overhead flexible budget:
Actual production was 14,000 units. Actual overhead costs were $27,000 for variable costs and $38,000 for fixed costs. Actual machine hours worked were 17,000 hours.
What is the standard variable overhead rate per machine hour?

• A)$2.16
• B)$3.30
• C)$1.39
• D)$3.00

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Definitions:

Common Shares

Equity securities representing ownership in a corporation, providing voting rights, and entitling holders to a share of the company’s success through dividends and/or capital appreciation.

Agency Approach

A mechanism used in financial management where one party (the agent) is allowed to act on behalf of another (the principal) in financial transactions or decisions.

Common Shares

Equity securities that represent ownership in a corporation, providing voting rights and entitling the holder to a share of the company’s success through dividends and/or capital appreciation.

Unamortized Premium

The portion of a bond premium that has not yet been amortized or gradually written off against earnings over the bond's life.