Majestic Corporation manufactures wheel barrows and uses budgeted machine hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data:

What is the flexible-budget amount for variable manufacturing overhead?

Question

Majestic Corporation manufactures wheel barrows and uses budgeted machine hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data:

What is the flexible-budget amount for variable manufacturing overhead?

Quizplus · Accepted Answer

Budgeted machine hours per unit = 17,085 ÷ 28,475 = 0.6
Budgeted machine hours allowed for 32,475 units = 32,475 × 0.6= 19,485
Budgeted variable overhead rate per machine hour = $358,785 ÷ 17,085 = $21.00
Flexible-budget amount = 19,485 × $21.00 = $409,185

Majestic Corporation Manufactures Wheel Barrows and Uses Budgeted Machine Hours