Homework Answers
Indirect labour cost per labor hour:
= $60,000 / 2,000
= $30
Supervisor salary = $80,000
1)
Maintenance cost for December:
= $256,800 - ($30 X 3,600) - $80,000
= $68,800
2)
Variable maintenance cost:
= ($68,800 - $56,000) / (3,600 - 2,000)
= $8
Fixed cost:
= $68,800 - (3,600 X $8)
= $40,000
Cost formula:
y = $8x + $40,000
3)
Total variable cost per labor hour:
= $30 + $8
= $38
Total fixed cost:
= $80,000 + $40,000
= $120,000
Cost formula for total overhead:
y = $38x + $120,000
4)
Total overhead cost:
= ($38 X 3,500) + $120,000
= $253,000
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