HA2011 Management Accounting - Assignment 1

Week 5 Question (10 marks)

The following information relates to the Moonie Park Manufacturing Company for the year 2012.

• Plant capacity 480,000 machine hours
• Normal level of production 432,000 machine hours
• Budgeted level of production 360,000 machine hours
• Budgeted manufacturing overhead $2,160,000
• Actual manufacturing overhead for the month of $175,000
• Actual machine hours used for February 2012 35,000

Calculate the predetermined overhead rates per machine hour based on practical capacity, normal capacity and budgeted capacity respectively.