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ACC569 Week 5 solutions - 17.65(60 min Using a flexible...

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17.65 (60 min) Using a flexible budget a. Standard machine hours per unit = production budgeted hours machine budgeted = 6,000 30,00 = 5 hours per unit b . Actual cost of direct material per unit = units 6,200 $83,00 $270,000 + = $56.94 per unit (rounded) c. Standard direct-material cost per machine hour = 30,000 $78,00 $252,000 + = $11 per machine hour d . Standard direct-labor cost per unit = unit per $84.50 units 6,000 $234,000 $273,000 = + e. Standard variable-overhead rate per machine hour = hours 2,000 $20,200 30,000 - 32,000 $627,000 - $647,200 = = $10.10 per machine hour f. First, continue using the high-low method to determine total budgeted fixed overhead as follows: Total budgeted overhead at 30,000 hours .................. $627,000 Total budgeted variable overhead at 30,000 hours (30,000 × $10.10) ...................................................... 303,000 Total budgeted fixed overhead ................................... $324,000 The key here is to realize that fixed overhead includes not only insurance and depreciation but also the fixed component of the semivariable-overhead costs (including maintenance, supplies, supervision, and inspection).
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Now, we can compute the standard fixed-overhead rate per machine hour, as follows: Standard fixed-overhead rate per machine hour = hours 30,000 $324,000 = $10.80 per hour
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17.65
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