Delicious Dishes Company Is Developing the Budgeted Variable Overhead Cost-Allocation

Delicious Dishes Company is developing the budgeted variable overhead cost-allocation rates for the next twelve months.DDC's operating managers select machine-hours as the cost-allocation base.Based on past performance,the operating managers estimate that it takes 0.70 machine hours per actual output unit.For 2013,the budgeted output is 167,000 dish sets,DDC budgets 60,000(0.70 × 167,000) machine hours.All of DDCs variable overhead costs are budgeted in a pool and estimated to be $1,950,000 for 2013.
Required
Compute the budgeted variable overhead cost rate per output unit.

A) $26.10 per dish set
B) $15.50 per dish set
C) $22.75 per dish set
D) $33.50 per dish set
E) $19.80 per dish set

Correct Answer:

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