Wattis Manufacturing has established the following master flexible budget:

\begin{array}{r}\text { Production in Units }\\ \begin{array}{|l|r|r|r|}\hline & \underline{100,00} & \underline{150,000} & 200,000 \\\hline \text { Variable expenses: } & & & \\\hline \text { Raw materials } & \$ 220,000 & 330,000 & 440,000 \\\hline \text { Direct labour } & 240,000 & 360,000 & 480,000 \\\hline \text { Manufacturing overhead } & 180,00 & 270,000 & 360,000 \\\hline \text { Selling and administrative } & \underline{100,00} & \underline{150,000} & \underline{200,000} \\\hline \text { Total variable expenses } & \$ 740,000 & \$ 1,110,000 & \$ 1,480,000 \\\hline\\\hline \text { Fixed expenses: } & & & \\\hline \text { Manufacturing overhead } & \$ 337,500 & \$ 337,500 & \$ 337,500 \\\hline \text { Selling and administrative } & \underline{250,000} & \underline{250,000} & \underline{250,000} \\\hline \text { Total fixed expenses } & \$ 587,500 & \$ 587,500 & \$ 587,500 \\\hline & & & \\\hline \text { Total expenses } & \$ 1,327,500 & \$ 1,697,000 & \$ 2,067,500 \\\hline\end{array}\end{array}

Manufacturing overhead is applied on the basis of machine hours.At standard,each unit of product requires one machine hour to complete.
Required:
a)The denominator activity level is 150,000 units.What are the predetermined variable and fixed manufacturing overhead rates?
b)Actual data for the year were as follows:

\begin{array}{|l|r|}\hline \text { Answer: } & \$ 211,680 \\\text { Actual variable manufacturing overhead cost } & \\\hline \text { Actual fixed manufacturing overhead cost } & \$ 343,000 \\\hline \text { Actual machine hours incurred } & 126,000 \\\hline \text { Units produced } & 120,000 \\\hline\end{array}

Yola Company Manufactures a Product with Standards for Direct Labour

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