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Keeran Corporation's flexible budget

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Question 7: (1 point)
Keeran Corporation's flexible budget for two levels of activity appears below:

Cost Formula (per machine-hour) Activity
(in machine-hours)
5,200 5,300
Variable overhead costs:
Lubricants $3.3 $ 17,160 $17,490
Power 1.8 9,360 9,540
Total variable overhead cost $5.1 26,520 27,030
Fixed overhead costs:
Depreciation 145,964 145,964
Taxes 62,556 62,556
Total fixed overhead cost 208,520 208,520
Total overhead cost $235,040 $235,550

If the denominator level of activity is 5,200 machine-hours, the fixed element in the predetermined overhead rate would be:

$580

$5.1

$45.2

$40.1

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This solution is comprised of a detailed explanation to answer what is the fixed element in the predetermined overhead rate.

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Question 7: (1 point)
Keeran Corporation's flexible budget for two levels of activity appears below:

Cost Formula (per machine-hour) Activity
(in machine-hours)
5,200 ...

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