Fermine manufactures wooden pallets. Its fixed production overheads for the year amount to 600,000. Its normal capacity, estimated by management from the average production expected over several years, is 100,000 units pallets. Following a drop in orders, it produced only 80,000 units pallets, an abnormally low level of production. Compute the fixed overheads included in the cost of the pallets produced and the unallocated fixed overheads.
- Fixed production overheads
- 600,000
- Normal capacity (pallets)
- 100,000
- Actual production (pallets)
- 80,000