Question

Glaston Company manufactures a single product using a JIT inventory system. The production budget indicates that the number of units expected to be produced are 185,000 in October, 193,500 in November, and 190,000 in December. Glaston assigns variable overhead at a rate of $0.75 per unit of production. Fixed overhead equals $142,000 per month. Compute the total budgeted overhead that would appear on the factory overhead budget for month of October.

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Answer #1

Total budgeted overhead = Variable overhead + Fixed overhead

= (185,000 * $0.75) + $142,000

= $138,750 + $142,000

= $280,750

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