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Lubov Fominskaja [6]
3 years ago
5

Jones Company allocates manufacturing overhead based on machine hours. Each chair produced should require 3 machine hours. Accor

ding to the static budget, the following is expected to incur: 1,200 machine hours per month (400 chairs x 3 hours per chair) $6,000 in variable manufacturing overhead costs $8,400 in fixed manufacturing overhead costs During January, Jones Company actually used 1,100 machine hours to make 410 chairs. The company spent $5,800 in variable manufacturing overhead costs and $8,100 in fixed manufacturing overhead costs. What is the fixed manufacturing overhead allocation rate (to the nearest cent)
Business
1 answer:
mars1129 [50]3 years ago
6 0

Answer:

the fixed manufacturing overhead allocation rate is $7 per hour

Explanation:

The computation of the fixed manufacturing overhead allocation rate is shown below;

Fixed manufacturing overhead allocation rate is

= Budgeted Fixed overhead  ÷ Budgeted allocation base

= $8,400 ÷ 1,200 budgeted machine hours

= $7.00 per hour

Hence, the fixed manufacturing overhead allocation rate is $7 per hour

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