Question

Bradford's estimated variable manufacturing overhead cost for a month in which scheduled production is 5,000 cases would be:

Answer 1

Answer: $120,000

Explanation:

Manufacturing Overhead for 5,000 units = Machine hours used to produce 5,000 units * Predetermined Overhead rate

2 hours are necessary to manufacture one case so for 5,000 units;

= 5,000 * 2

= 10,000 hours

From the equation, the Predetermined overhead rate is $12.

Manufacturing Overhead for 5,000 units = 10,000 * 12

= $120,000