J&J; Materials and Construction Corporation produces mulch and distributes the p

Question

J&J; Materials and Construction Corporation produces mulch and distributes the product by using dump trucks. The company uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data: 710 truckloads 568 hours Budgeted output units Budgeted machine-houns Budgeted variable manufacturing overhead costs for 710 loads$87,756 Actual output units produced Actual machine-hours used Actual variable manufacturing overhead costs 635 truckloads 468 hours $82,896 What is the budgeted variable manufacturing overhead cost per unit? OA. OB. $130.54 per unit $154 50 per unit C. $12360 per unit D. $177.13 per uni

Explanation / Answer

Answer C : $123.60 per unit

Budgeted output units = 710 truckloads

Budgeted variable manufacturing overhead cost per 710 truckloads = $87,756

Budgeted variable manufacturing overhead cost per unit = $87,756/710 = $123.60

Note: Here unit of output is in truckload

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