The brickworks Hautmont incurs 900,000 of fixed production overheads for the year. Its normal capacity is 150,000 units pallets of bricks. An exceptional order for a major construction project raised production to 180,000 units pallets, an abnormally high level. All pallets produced are in inventory at the reporting date. Compute the fixed overhead to be allocated to each pallet.
- Fixed production overheads
- 900,000
- Normal capacity (pallets)
- 150,000
- Actual production (pallets)
- 180,000