Question

Davidson Corporation manufactured 58,500 units during September. The following fixed overhead data relates to September: Actual Static Budget Production 58,500 units 58,000 units Machine-hours 3,320 hours 3,480 hours Fixed overhead costs for September $170,220 $170,520 What is the amount of fixed overhead allocated to production

Answer 1

Answer:

$171,900

Explanation:

Davidson corporation manufactured 58,500 units during September

The first step is to calculate the fixed overhead machine cost per hour

= 170,520/3,480

= $48

The machine hours can be calculated as follows

= 3,480/58,000

= 0.06

The fixed overhead cost can be calculated as follows

= 0.06 × 49

= 2.94

Therefore the amount of fixed overhead that is allocated to production can be calculated as follows

= 58,500 × 2.94

= $171,900