Really Great Corporation manufactures industrial-sized landscaping trailers and

Question

Really Great Corporation manufactures industrial-sized landscaping trailers and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data: Budgeted output units Budgeted machine-hours Budgeted variable manufacturing overhead costs for 40,000 units 40,000 units 10,000 hours $310,000 Actual output units produced Actual Actual variable manufacturing overhead costs 36,500 units 14,600 hours machine-hours used $350,400 What is the budgeted variable overhead cost rate per output unit? OA. S7.75 0 B. $12.40 C. $31.00 OD. S9.60

Explanation / Answer

Budgeted variable overhead cost rate per output unit = budgeted variable overhead cost / Budgeted output units

$310,000 / 40,000 units = $7.75 (option A)

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