The Beach Company currently produces sandals in an automated process. Expected production per month is 20,000 units. The required direct materials cost $1.50 per unit. Manufacturing fixed overhead costs are $40,000 per month. Manufacturing overhead is allocated based on units of production. is the budgeted manufacturing fixed overhead rate.
A) $.50 per unit
B) $2.00 per unit
C) $1.50 per unit
D) None of these answers is correct.

Question

Quizplus · Accepted Answer

The budgeted manufacturing fixed overhead rate is calculated by dividing the total fixed overhead costs by the expected production units. $40,000 / 20,000 units = $2.00 per unit.

The Beach Company Currently Produces Sandals in an Automated Process