Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019: Denominator volumenumber of units 8,000

Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019:

Denominator volumenumber of units 8,000
Denominator volumepercent of capacity 80 %
Denominator volumestandard direct labor hours (DLHs) 24,000
Budgeted variable factory overhead cost at denominator volume $ 103,200
Total standard factory overhead rate per DLH $ 15.10

During 2019, Bluecap worked 28,000 DLHs and manufactured 9,600 units. The actual factory overhead cost for the year was $14,000 greater than the flexible budget amount for the units produced, of which $6,000 was due to fixed factory overhead. In preparing a budget for 2020 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be "practical capacity"), to manufacture 9,000 units at a budgeted total of 27,000 DLHs.

The total budget for fixed factory overhead in 2019 for Bluecap Co., to the nearest whole dollar, was:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost-Benefit Analysis

Authors: E.J. Mishan, Euston Quah

6th Edition

1138492752, 978-1138492752

More Books

Students also viewed these Accounting questions

Question

In Problem find the indicated derivative and simplify dg

Answered: 1 week ago