Answer the Following Questions Using the Information Below

question 156

Multiple Choice

Answer the following questions using the information below:
Gus Corporation manufactured 10,000 golf bags during April. The fixed overhead cost-allocation rate is $40.00 per machine-hour. The following fixed overhead data pertain to March:

-What is the flexible-budget amount?

• A)$200,000
• B)$204,000
• C)$240,000
• D)$244,000

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Definitions:

Fixed Manufacturing Overhead

The set of costs associated with the production process that do not change with the level of production, including rent, salaries, and insurance.

Job-Order Costing System

A cost accounting system that accumulates manufacturing costs separately for each job or batch.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to individual products or job orders, based on a pre-established criterion such as direct labor hours.

Machine-Hours

A measure of production time, representing the number of hours a machine is operated in the production of goods.