J&J Materials and Construction Corporation produces mulch and distributes the product by using dump trucks. The company uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data:

What is the budgeted variable manufacturing overhead cost per unit?
A) $154.50 per unit
B) $177.13 per unit
C) $130.54 per unit
D) $123.60 per unit

Question

J&J Materials and Construction Corporation produces mulch and distributes the product by using dump trucks. The company uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data:

What is the budgeted variable manufacturing overhead cost per unit?

What is the budgeted variable manufacturing overhead cost per unit?
A) $154.50 per unit 
B) $177.13 per unit 
C) $130.54 per unit 
D) $123.60 per unit

Quizplus · Accepted Answer

Budgeted fleet hours per unit = 568 ÷ 710 = 0.8
Budgeted variable overhead rate per machine hour = $87,756.00 ÷ 568 = $154.50
Budgeted variable manufacturing overhead cost per unit = 0.8 × $154.50 = $123.60

J&J Materials and Construction Corporation Produces Mulch and Distributes the Product