Hi All. Need help solutions on this problem.
Question: The Mulvey Company derived the following cost relationship from a regression analysis of its monthly manufacturing overhead cost.
C=Php80,000 + Php12 M
C= Monthly manufacturing overhead cost.
M= Machine Hours
The standard error of the estimate of the regression is Php6,000. The standard time required to manufacture one six-unit case of of Mulvey's single product is 4 machine hours. Mulvey applies manufacturing overhead to production on the basis of machine hours, and its normal annual production is 50,000 cases.
Mulvey's estimated variable manufacturing overhead cost for a month in which scheduled overhead is 5,000 cases will be.
Ans: C Php240,000
Mulvey's predetermined fixed manufacturing overhead rate would be
A. Php1.60 per machine hour
B. Php4.00 per machine hour
C. Php1.20 per machine hour
D. Php4.80 per machine hour
Ans: D. Php4.80 per machine hour