Question

Flexible Overhead Budget

Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 12,000 hours of productive capacity in the department:

Variable overhead cost:
Indirect factory labor	$88,800
Power and light	5,040
Indirect materials	27,600
Total variable overhead cost		$121,440
Fixed overhead cost:
Supervisory salaries	$42,500
Depreciation of plant and equipment	26,720
Insurance and property taxes	17,000
Total fixed overhead cost		86,220
Total factory overhead cost		$207,660

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 10,000, 12,000, and 14,000 hours of production. Round your interim computations to the nearest cent, if required. Enter all amounts as positive numbers.

Leno Manufacturing Company
Factory Overhead Cost Budget-Press Department
For the Month Ended November 30
Direct labor hours	10,000	12,000	14,000
Variable overhead cost:
Indirect factory labor	$	$	$
Power and light
Indirect materials
Total variable factory overhead	$	$	$
Fixed factory overhead cost:
Supervisory salaries	$	$	$
Depreciation of plant and equipment
Insurance and property taxes
Total fixed factory overhead	$	$	$
Total factory overhead cost	$	$	$

Answer 1

Leno Manufacturing Company
Factory Overhead Cost Budget-Press Department
For the Month Ended November 30
Direct labor hours	10000	12000	14000
Variable overhead cost:
Indirect factory labor	74000	88800	103600
Power and light	4200	5040	5880
Indirect materials	23000	27600	32200
Total variable factory overhead	101200	121440	141680
Fixed factory overhead cost:
Supervisory salaries	42500	42500	42500
Depreciation of plant and equipment	26720	26720	26720
Insurance and property taxes	17000	17000	17000
Total fixed factory overhead	86220	86220	86220
Total factory overhead cost	187420	207660	227900
Workings:
Direct labor hours	10000	14000
Variable overhead cost:
Indirect factory labor	=88800/12000*10000	=88800/12000*14000
Power and light	=5040/12000*10000	=5040/12000*14000
Indirect materials	=27600/12000*10000	=27600/12000*14000