A Manufacturer of Industrial Equipment Has a Standard Costing System $( \mathrm { MHs } )$

question 151

Multiple Choice

A manufacturer of industrial equipment has a standard costing system based on machine hours $( \mathrm { MHs } )$ as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
$\begin{array}{|l|r|}\hline \text { Denominator Level of Activity } & 39,00 \mathrm{MHs} \\\hline \text { Overhead Costs at the Denominator Activity Level: } & \\\hline \text { Variable Overhead Cost } & \$ 33,345 \\\hline \text { Fixed Overhead Cost } & \$ 61,425 \\\hline\end{array}$
The following data pertain to operations for the most recent period:
$\begin{array}{|r|r|}\hline \text { Actual Hours } & 3,900 \mathrm{MHs} \\\hline \text { Standard Hours Allowed for the Actual Output } & 3,952 \mathrm{MHs} \\\hline \text { Actual Total Variable Overhead Cost } & \$ 32,565 \\\hline \text { Actual Total Fixed Overhead Cost } & \$ 60,675 \\\hline\end{array}$
-What was the total predetermined overhead rate,rounded to the nearest cent?

• A) $23.59.
• B) $23.91.
• C) $23.98.
• D) $24.30.

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Definitions:

GDP

Gross Domestic Product, a measure of the total economic output of a country, representing the total value of all goods and services produced over a specific time period.

Combined Profit

The total profit earned by all firms in a particular market or industry, summed together.

Policies

Principles or rules established by organizations, governments, or groups to guide decisions and achieve rational outcomes.

Policies

Guidelines or principles that direct actions towards specific goals or objectives, often set by governments, organizations, or institutions.