Correct answer a. Valley's predetermined overhead application rate is $2.09.
(Indirect material + Indirect labor + Utilities) ÷ Production
($1,000 + $10,000 + $12,000) ÷ 11,000 = $2.09
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Patricia Abels CPA
Academic
The University of Findlay
Findlay OH
United States
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Original Message:
Sent: 08-04-2012 05:43 AM
From: Ayda Fahim Samaan
Subject: part 1 Question
hi every body
Using the following budget data for Valley Corporation, which produces only one
product, calculate the company's predetermined factory overhead application rate for
variable overhead.
Units to be produced 11,000
Units to be sold 10,000
Indirect materials, varying with production $ 1,000
Indirect labor, varying with production 10,000
Factory supervisor's salary,
incurred regardless of production 20,000
Depreciation on factory building and equipment 30,000
Utilities to operate factory machines 12,000
Security lighting for factory 2,000
Selling, general and administrative expenses 5,000
a. $2.09.
b. $2.30.
c. $4.73.
d. $5.20
thankes
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Ayda Fahim Samaan
Accountant
Mina Tex
Sidi Beasher
Egypt
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