Question

Roberson Corporation manufactured 30,000 ice chests during September. The variable overhead cost-allocation base is $11.25 per machine-hour. The following variable overhead data pertain to September:

Actual Budgeted
Production 30,000 units 24,000 units
Machine-hours 15,000 hours 10,800 hours
Variable overhead cost per machine-hour: $11.00 $11.25
What is the flexible-budget amount?

Answer 1

$151,875

Step-by-step explanation:

Calculation for the flexible-budget amount

Using this formula

Flexible-budget amount=Actual Production units×(Budgeted Machine-hours/Budgeted Production units)×Budgeted Variable overhead cost per machine-hour

Let plug in the formula

Flexible-budget amount=30,000 × (10,800/24,000) × $11.25

Flexible-budget amount=30,000×0.45×$11.25

Flexible-budget amount= $151,875

Therefore the Flexible-budget amount is $151,875