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AMPLE 7: etermined overhead Rate;overhead variances Weller Company's flexible budget for ufacturing overhead (in condensed form) is given below: Formula (per 9,000 $1.05 8,400 s
AMPLE 7: etermined overhead Rate;overhead variances Weller Company's flexible budget for ufacturing overhead (in condensed form) is given below: Formula (per 9,000 $1.05 8,400 s 9A50 $10,500 Fixed cost. 24800 24000 Total overhead cost The following information is available for a recent period: a. The denominator activity of 8,000 machine-hours is used to compute the predetermined overhead b. At the 8,000 standard machine-hours level of activity, the company should produce 3,200 units of product. c. The company's actual operating results were: Number of units produced Actual variable overhead costs $25,100 Actual fixed overhead costs 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. 2. Compute the standard hours allowed for the actual production. EXAMPLE CONTINUED ON NEXT PAGE 8-17
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