Question: A company has a normal production level of 40,000 units per year and production that is more than +/10% from this level is considered abnormal.

A company has a normal production level of 40,000 units per year and production that is more than +/€”10% from this level is considered abnormal. Fixed overhead costs are $4,000,000.
Required:
For the following production levels, determine the fixed overhead allocation rate per unit of production:

Production level 50,000 units 46,000 units 42,000 units 40,000 units 39,000 units 30,000 units Fixed overhead allocation rate 0 units

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