Question

Montgomery Limited has developed the following flexible budget formulas for its four overhead item Variable rate per Overhead item Fixed Cost direct labour hour Maintenance $10,000 $3.00 Power $1,500 $0.30 Indirect labour cost $12.00 Equipment lease $7,000 Total $18,500 $15.30 Montgomery normally produces 15,000 units (each unit requires 0.30 direct labour hours); however this y 19,000 units were produced with the following actual costs: Overhead item Actual costs Maintenance $14,000 $2,200 Indirect labour cost $70,000 Equipment lease $7,000 Total costs $93,200 Power Prepare an overhead budget for the expected activity level of 10,000 units. The total budgeted overhead is: A. $139,400 B. $64,400 C. $124,000 D. $12,400 None of these. 6. Calculate the after-the-fact budget for the actual level of activity $91,600 B. $115,000 $118.600 D. $77.400 None of these. in an after-the-fact flexible budget, calculate the variance for power A. B. C. 7. Using an after-the-fact flexible $1.000 F $1,010 U $3,000 U $1,010 F None of these. D. E. bibility for the variable overhead sandi

Answer 1

Answer is given below

5 Answer is Option B) $64,400 Overhead budget for 10,000 units Fixed $10,000 $1,500 Maintenance Power Indirect Labor cost Equipment Lease Variable $9,000 $900 $36,000 Total $19,000 $2,400 $36,000 $7,000 $64,400 $7,000 $18,500 $45,900 Variable Overhead is calculated by Output * 0.30 hours X rate per direct labor hour Fixed overhead does not change at different levels of activity 6 Answer is Option E) None of these Overhead Budget for 19,000 units | Fixed $10,000 $1,500 Maintenance Power Indirect Labor cost Equipment Lease Variable $17,100 $1,710 $68,400 Total $27,100 $3,210 $68,400 $7,000 $105,710 $7,000 $18,500 $87,210 Variable Overhead is calculated by Output * 0.30 hours X rate per direct labor hour Fixed overhead does not change at different levels of activity 1 Answer is Option D) $1,010 F Variance for Power Flexible Budget for Actual output Actual Cost of power Variance for Power $3,210 $2,200 $1,010 F