Variable overhead cost:
Indirect factory labor $180,000
Power and light12,000
Indirect materials 64,000
Total variable overhead cost $256,000
Fixed overhead cost:
Supervisory salaries $ 80,000
Depreciation of plant and equipment 50,000
Insurance and property taxes 32,000
Total fixed overhead cost 162,000
Total factory overhead cost $418,000
Assuming that the estimated costs for November are the same as for October, prepare a flexible factory overhead cost budget for the Press Department for November for 18,000, 20,000, and 22,000 hours of production.
Answer:
LENO MANUFACTURING COMPANY
Factory Overhead Cost Budget—Press Department
For the Month Ended November 30, 2014
Direct labor hours 18,000 20,000 22,000
Variable overhead cost:
Indirect factory labor $162,0001
P
ower and light 10,800
2 I
ndirect materials 57,6003
T
otal variable factory overhead $230,400 $256,000 $281,600
Fixed factory overhead cost:
Supervisory salaries $ 80,000 $ 80,000 $ 80,000
Depreciation of plant and equipment 50,000 50,000 50,000
Insurance and property taxes 32,000 32,000 32,000
Total fixed factory overhead $162,000 $162,000 $162,000
Total factory overhead $392,400 $418,000 $443,600
18,000 × ($180,000 ÷ 20,000)
18,000 × ($12,000 ÷ 20,000)
18,000 × ($64,000 ÷ 20,000)