Lancelot Corporation manufactures tennis gear and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data:

What is the amount of the budgeted variable manufacturing overhead cost per unit?

Question

Lancelot Corporation manufactures tennis gear and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data:

What is the amount of the budgeted variable manufacturing overhead cost per unit?

Quizplus · Accepted Answer

Budgeted machine hours per unit = 28,500 ÷ 9,500 = 3
Budgeted variable overhead rate per machine hour = $68,400 ÷ 28,500 = $2.40
Budgeted variable manufacturing overhead cost per unit = 3 × $2.40 = $7.20

Lancelot Corporation Manufactures Tennis Gear and Uses Budgeted Machine-Hours to Allocate