Darling Company, Which Applies Overhead to Production on the Basis

question 79

Multiple Choice

Darling Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:
Actual units produced: 12,000
Actual fixed overhead incurred: $730,000
Actual machine hours worked: 60,000
Budgeted fixed overhead: $720,000
Planned level of machine-hour activity: 50,000
If Darling estimates four hours to manufacture a completed unit, the company's standard fixed overhead rate per machine hour would be:

• A) $12.00.
• B) $14.40.
• C) $14.60.
• D) $15.00.
• E) None of the other answers are correct.

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