Q1) Vektek, Inc. beleives a machine hour is best activity base for its manufacturing overhead. Estimate of annual overhead costs for its jobs was $615,000. Company used 1,000 hours of processing on Job No. B12 in the period and incurred overhead costs totaling $630,000. Budgeted machine hours for year totaled 20,000. How much overhead must be applied to Job No. B12?
Q2) Describe how capacity utilization affects product mix and profitability.