EVE, Inc. which uses a standard costing system, has the following information fo

Question

EVE, Inc. which uses a standard costing system, has the following information for the current year. The budgeted fixed costs are $720,000. The budgeted activity level of machine-hours, the allocation base, is 240,000. The firm budgets at a level of 480,000 units of product HUS. During the year, the firm actually produced 504,000 units of HT EVE used 245,000 machine-hours during the period and incurred costs totaling $715,000 What is the rate per machine-hour for fixed overhead allocation? $3.00 $2.98 $2.93 $1.50

Explanation / Answer

Ans. Machine hour rate = Budgeted fixed cost / Budgeted machine hours = $720,000 / 240,000 = $3.00

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