A Company Has Fixed Production Overhead Costs Totalling $25,000 B)

question 93

Multiple Choice

A company has fixed production overhead costs totalling $25,000. The normal production level is 2,500 units per year, yielding a standard fixed overhead rate of $10.00 per unit. If the actual production level is 2,000 units, how much would be the amount of fixed overhead per unit and the amount of total fixed overhead included in inventory? Select the letter for the best answer:

• A) \[\begin{array} { | l | l | }
• \text { Fixed overhead per unit } & \text { Fixed overhead included in inventory } \\
• \hline 12.50 & 25,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | }
• \text { Fixed overhead per unit } & \text { Fixed overhead included in inventory } \\
• \hline 10.00 & 25,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | }
• \text { Fixed overhead per unit } & \text { Fixed overhead included in inventory } \\
• \hline 10.00 & 20,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | }
• \text { Fixed overhead per unit } & \text { Fixed overhead included in inventory } \\
• \hline 12.50 & 20,000 \\
• \hline
• \end{array}\]

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