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ucher Company uses a standard cost system in which manufacturing overhead costs are applied to units of product on the basis of standard machine-hours. The company's standards are based on variable manufacturing overhead of $3 per machine-hour and fixed manufacturing overhead of $300,000 per year. The denominator level of activity is 30,000 machine-hours. Standards call for 2.5 machine-hours per unit of output. Ac for the year are given below:
Requirements
The Miller-Porter company sells powder coating equipment at a sales price of $50,000 per unit. The sales price includes delivery, installation, and initial testing of the equipment.
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