Question

The processing department has monthly budgeted manufacturing overhead of $180,000 plus $3.00 per machine hour. If a flexible budget report shows $348,000 for total budgeted manufacturing overhead costs for the month, what was the actual level of activity achieved during the month?

Answer 1

Answer:

56,000 machine hours

Explanation:

Data provided in the question:

Monthly budgeted manufacturing overhead = $180,000 + 3 per machine hours

Total budgeted manufacturing overhead costs = $348,000 for the month

Now,

Let the actual level of activity achieved during the month be 'x'

Therefore,

Total budgeted manufacturing overhead costs = $180,000 + 3(x)

or

$348,000 = $180,000 + $3(x)

or

$3x = $348,000 - $180,000

or

$3x = $168,000

or

x = 56,000 machine hours