The standard capacity of a factory is 9,000 units per month.Cost and production data follow: What is the amount of overhead allowed for the actual volume of production?

Question

The standard capacity of a factory is 9,000 units per month.Cost and production data follow:  What is the amount of overhead allowed for the actual volume of production?

Quizplus · Accepted Answer

To calculate the amount of overhead allowed for the actual volume of production, we need to use the predetermined overhead rate of $2.50 per unit.

Actual volume of production = 8,900 units
Overhead allowed for actual volume of production = Actual volume of production x Predetermined overhead rate
= 8,900 x $2.50
= $22,250

Therefore, the best choice is B) $22,400, which is the closest option to $22,250.

The Standard Capacity of a Factory Is 9,000 Units Per