Regal Company Uses a Single Cost Pool for Fixed Manufacturing

question 110

Multiple Choice

Regal Company uses a single cost pool for fixed manufacturing overhead. The amount for June 2012 was budgeted at $500,000; however, the actual amount was $700,000. Actual production for June 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 output unit?

• A) $28.17 per unit
• B) $39.44 per unit
• C) $40.40 per unit
• D) $56.56 per unit
• E) $65.17 per unit

---

Definitions:

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including material, labor, and overhead costs.

Horizontal Analysis

An analytical technique in accounting that compares financial data over multiple periods to detect trends and changes.

Trend Analysis

Involves analyzing financial statements and indicators over a certain period to identify patterns or trends in financial performance or condition.

Base Year

A specific year or period that serves as a benchmark for financial analysis or comparison with other years.