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Using the following budget data for Valley Corporation, which produces only one product, calculate the companys predetermined manufacturing overhead application rate for variable overhead. Hint:
Using the following budget data for Valley Corporation, which produces only one product, calculate the companys predetermined manufacturing overhead application rate for variable overhead. Hint: The factory supervisors salary is direct labor, since it is incurred regardless of production. SG&A expenses relate to the entire operations of Valley Corporation and not just related to manufacturing.
Units to be produced | 11,000 |
Units to be sold | 10,000 |
Indirect materials, varying with production | $1,000 |
Indirect labor, varying with production | 10,000 |
Factory supervisors salary, incurred regardless of production | 20,000 |
Depreciation on factory building and equipment | 30,000 |
Utilities to operate factory machines | 12,000 |
Security lighting for factory | 2,000 |
Selling, general and administrative (SG&A) expenses | 5,000 |
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