Pohl Corporation Uses a Standard Cost System in Which Manufacturing

question 23

Multiple Choice

Pohl Corporation uses a standard cost system in which manufacturing overhead is applied on the basis of standard machine-hours. For June, the company's manufacturing overhead flexible budget showed the following total budgeted costs at a denominator activity level of 20,000 machine-hours:

During June, 17,000 machine-hours were used to complete 13,000 units of product, and the following actual total overhead costs were incurred:

At standard, each unit of finished product requires 1.4 hours of machine time.


-The total predetermined overhead rate per machine-hour for June was:

• A)$2.57 per machine-hour
• B)$1.30 per machine-hour
• C)$2.80 per machine-hour
• D)$3.15 per machine-hour

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Definitions:

Seasonal Variation

The fluctuations in data or activity that occur at specific regular intervals due to seasonal factors, such as quarterly or annually.

Steady Growth

A consistent and uninterrupted increase in size, value, quantity, or extent over a period of time.

Exponential Smoothing

A time series forecasting method for univariate data that applies weighted averages of past observations, giving more weight to recent observations.

Long-term Trend

The persistent movement or direction in data over a long period, revealing a general pattern of change.