4) Majestic Corporation manufactures wheel barrows and uses budgeted machine hou

Question

4) Majestic Corporation manufactures wheel barrows and uses budgeted machine hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data: Budgeted output units Budgeted machine-hours Budgeted variable manufacturing overhead costs for 28,475 units 28,475 units 17,085 hours $358,785 Actual output units produced Actual machine-hours used Actual variable manufacturing overhead costs 32,475 units 15,000 hours $384,060 What is the flexible-budget amount for variable manufacturing overhead?

Explanation / Answer

The flexible-budget amount for variable manufacturing overhead is:

= 32,475 x ($358,785/28,475)

= $409,185

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