Question

Really Great Corporation manufactures industrialminussized landscaping trailers and uses budgeted machineminushours to allocate variable manufacturing overhead. The following information pertains to the​ company's manufacturing overhead​ data:Budgeted output units42 comma 400 unitsBudgeted machineminushours10 comma 600 hoursBudgeted variable manufacturing overhead costs for 42 comma 400 units$ 349 comma 800Actual output units produced28 comma 800 unitsActual machineminushours used14 comma 400 hoursActual variable manufacturing overhead costs$ 403 comma 200What is the budgeted variable overhead cost rate per output​ unit?

Answer 1

Allocated overhead per unit= $132 per unit

Step-by-step explanation:

Giving the following information:

Budgeted machine-hours= 10,600 hours

Budgeted variable manufacturing overhead costs for 42,400 units $349,800

We need to calculate the estimated overhead rate, then allocate overhead to each unit:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 349,800/10,600

Estimated manufacturing overhead rate= $33 per machine hour

Each unit requires:

Machine hour per unit= 42,400/10,600= 4 machine hour

Allocated overhead per unit= 33*4= $132 per unit