67. CSO: 1A4a LOS: 1A4m
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.
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