Darling Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:
Actual units produced: 12,000
Actual fixed overhead incurred: $730,000
Actual machine hours worked: 60,000
Budgeted fixed overhead: $720,000
Planned level of machine-hour activity: 50,000
If Darling estimates four hours to manufacture a completed unit, the company's standard fixed overhead rate per machine hour would be:
A) $12.00.
B) $14.40.
C) $14.60.
D) $15.00.
E) None of the other answers are correct.

Question

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The Answer of Darling Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:
Actual units produced: 12,000
Actual fixed overhead incurred: $730,000
Actual machine hours worked: 60,000
Budgeted fixed overhead: $720,000
Planned level of machine-hour activity: 50,000
If Darling estimates four hours to manufacture a completed unit, the company's standard fixed overhead rate per machine hour would be:
A) $12.00.
B) $14.40.
C) $14.60.
D) $15.00.
E) None of the other answers are correct.

Darling Company, Which Applies Overhead to Production on the Basis