Jacklin Stampings allocates overhead to products based on machine hours. It uses a flexible overhead budget to
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Question:
Jacklin Stampings allocates overhead to products based on machine hours. It uses a flexible overhead budget to calculate a predetermined overhead rate at the beginning of the year. This rate is used during the year to allocate overhead to the various stampings produced. The following table summarizes operations for the last year:
Budgeted fixed overhead........... $ 3,800,000
Over absorbed overhead variance....... $ 220,000
Actual machine hours ........... 46,000
Variable overhead per machine hour..... $ 100
Actual overhead incurred........... $ 8,750,000
Required:
In setting the overhead rate at the beginning of the year, what budgeted volume of machine hours was used?n
Related Book For
Accounting for Decision Making and Control
ISBN: 978-0078025747
8th edition
Authors: Jerold Zimmerman
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