Answered

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ABC Company's production budget for March is 32,000 units. Budgeted fixed overhead is $64,000. ABC's standard fixed overhead application rate is $2 per machine hour and each unit is allowed a standard of 1 hour of machine time. Actual fixed overhead for March is $67,000 Actual production in March is 36,000 units. To calculate its standard fixed overhead application rate, ABC divided its budgeted (units/overhead) by its budgeted (units/overhead)

Sagot :

Answer:

Overheads by its budgeted units.

Explanation:

Given that

Budgeted fixed overhead = $64,000

Budgeted output = 32,000 units

We know that

Standard fixed overhead application rate is

= Budgeted fixed overhead ÷ Budgeted output

= $64,000 ÷ 32,000

= $2 per unit

So, Overheads by its budgeted units.

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