Question

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 16,000 hours of productive capacity in the department:

Variable overhead cost:
Indirect factory labor	$145,600
Power and light	5,120
Indirect materials	44,800
Total variable overhead cost		$195,520
Fixed overhead cost:
Supervisory salaries	$68,430
Depreciation of plant and equipment	43,010
Insurance and property taxes	27,370
Total fixed overhead cost		138,810
Total factory overhead cost		$334,330

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 14,000, 16,000, and 18,000 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	14,000	16,000	18,000
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 14000 16000 18000 Variable Overhead Costs: Indirect Factory labor $ 127,400 $ 145,600 $163,800 Power and light $ 4,480 S 5,120 S 5,760 Indirect Materials $ 39,200 S 44.800 S 50,400 Total Variable factory overhead | $ 171.080 $ 195,520 $219,960 Fixed Factory overhead costs: Supervisory salaries $ 68,430 S 68.430 S 68.430 Depreciation of plant and equipment S 43.010S 43,010 $ 43,010 Insurance and property taxes $ 27,370 $ 27,370 $ 27.370 Total Fixed factory overhead $138.810 $138.810 $138.810 Total Factory overhead $309.890 $334,330 $358,770 Notes: Fixed cost doesn't change based on increase or decrease in production while variable cost change based on increase or decrease in production.