Randy's Production Company Uses a Single Cost Pool for Fixed

question 62

Multiple Choice

Randy's Production Company uses a single cost pool for fixed manufacturing overhead.The amount for May 2018 was budgeted at $250,000; however, the actual amount was $350,000.Actual production for May was 12,500 units, and actual machine hours were 10,000.Budgeted production included 17,750 units and 12,375 machine hours.What is the budgeted fixed overhead rate per input unit?

• A)$25.00 per unit
• B)$35.00 per unit
• C)$20.00 per unit
• D)$14.09 per unit
• E)$14.08 per unit

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Definitions:

Preferred Stock

Preferred stock is a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, typically coming with dividend priority.

Entitles

Grants or gives a right or a claim to something, often used in legal and financial contexts.

Investment Account

A financial account held by an investment dealer that a client uses to keep and trade investment securities.

Equity Method

An accounting technique used to record investments in associate companies where the investor has significant influence but not full control.