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 11,000 hours of productive capacity in the department:

Variable overhead cost:
Indirect factory labor	$104,500
Power and light	3,190
Indirect materials	30,800
Total variable overhead cost		$138,490
Fixed overhead cost:
Supervisory salaries	$48,470
Depreciation of plant and equipment	30,470
Insurance and property taxes	19,390
Total fixed overhead cost		98,330
Total factory overhead cost		$236,820

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 9,000, 11,000, and 13,000 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	9,000	11,000	13,000
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 9000 11000 13000 Variable Overhead Costs: Indirect Factory labor $ 85,500 $ 104,500 $123,500 Power and light $ 2,610 S 3,190 3,770 Indirect Materials $ 25,200 $ 30,800 $ 36,400 Total Variable factory overhead $ 113,310 $ 138,490 $163,670 Fixed Factory overhead costs: Supervisory salaries $ 48,470 $ 48,470 $ 48,470 Depreciation of plant and equipment $ 30,470 $ 30,470 $ 30,470 Insurance and property taxes $ 19,390 $ 19,390 $ 19,390 Total Fixed factory overhead $ 98,330 $ 98,330 $ 98,330 Total Factory overhead $ 211,640 $236,820 $262,000 Notes: Fixed cost doesn't change based on increase or decrease in production while variable cost change based on increase or decrease in production.