Asked by Micaila Reinschild on Jul 13, 2024
Verified
Bob's Biscuit Corporation budgeted $1,200,000 of factory overhead cost for the coming year. Its plantwide allocation base, machine hours, is budgeted at 100,000 hours. Budgeted units to be produced are 200,000 units. Bob's plantwide factory overhead rate is $12 per machine hour.
Plantwide Allocation Base
A single criterion, often direct labor hours or machine hours, used to allocate the total overhead of a plant to various products or cost objects.
Budgeted Units
The quantity of products or services that are planned to be sold or produced over a specific period, as per the budget.
- Calculate factory overhead rates and understand their implications on product costing.
Verified Answer
HA
Hillary Anne CarbonelJul 17, 2024
Final Answer :
True
Explanation :
The plantwide factory overhead rate is calculated by dividing the total budgeted factory overhead cost by the total budgeted machine hours. In this case, $1,200,000 divided by 100,000 hours equals $12 per machine hour.
Learning Objectives
- Calculate factory overhead rates and understand their implications on product costing.
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