B. Total fixed costs inereas C. It is impossible to determine whether variable a

Question

B. Total fixed costs inereas C. It is impossible to determine whether variable and fixed costs will increase or decrease ba activity (within the relevant range) Per unit variable cost increases as the level of activity increases (within the relevant range) D. E. ses as the level of activity increases (within the relevant range) Per unit fixed cost decrea Tallahassee Company is highly automated and uses a computer to control manufacturing operations. Tallahassee uses a job-order costing system and applies manufacturing overhead (MOH) cost to products on the basis of computer hours. The estimates below were used in preparing the predetermined OH rate at the beginning of the year 2 Fixed MOH cost Variable MOH per computer hour Computer hours s 1,275,000 3.00 85,000 hrs During the year, a severe economic recession resulted in the cutting back production and the building of inventory in year: the company's warehouse. The company's cost records revealed the following actual cost and operating data for the Computer-hours Manufacturing overhead cost Balances at year-end: Work-in-process Inventory Finished Goods Inventory Costs of Good Sold 60,000 $1 ,350,000 $160,000 $1,040,000 $2,800,000 What is the predetermined overhead rate for the year? $15.00 per hour S21.25 per hour MOH Applied $22.50 per hour $18.00 per hour l,3SO $15.88 per hour Compo

Explanation / Answer

Calculate predetermine overhead rate :

Predetermine overhead rate = (1275000/85000)+3.00 = 18 per computer hour

So answer is d) $18.00 per hour

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