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19 March, 03:58

The processing department has monthly budgeted manufacturing overhead of $180,000 plus $3.00 per machine hour. If a flexible budget report shows $348,000 for total budgeted manufacturing overhead costs for the month, what was the actual level of activity achieved during the month?

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  1. 19 March, 04:02
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    56,000 machine hours

    Explanation:

    Data provided in the question:

    Monthly budgeted manufacturing overhead = $180,000 + 3 per machine hours

    Total budgeted manufacturing overhead costs = $348,000 for the month

    Now,

    Let the actual level of activity achieved during the month be 'x'

    Therefore,

    Total budgeted manufacturing overhead costs = $180,000 + 3 (x)

    or

    $348,000 = $180,000 + $3 (x)

    or

    $3x = $348,000 - $180,000

    or

    $3x = $168,000

    or

    x = 56,000 machine hours
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