Question

The following information applies to the questions displayed below Kwikeze Company set the following standard costs for one unit of its product. $27.00 18.00 24.00 Direct materials (4.5 lbs.@ $6 per lb.) Direct labor (1.5 hrs. @ $12 per hr) Overhead (1.5 hrs.@ $16 per hr.) Total standard cost $69.00 The predetermined overhead rate ($16 per direct labor hour) is based on an expected volume of 75% of the any's budgeted over month at the 75% level. Overhead Budget (75% Capacity) Variable overhead costs $22,500 Indirect materials Indirect labor 90,000 22,500 Power Repairs and maintenance 45,000 $180,000 Total variable overhead costs Fixed overhead costs Depreciation-building Depreciation-machinery 24,000 72,000 18,000 66,000 Tax and insurance Supervision 180,000 Total fixed overhead costs $360,000 Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October Direct materials (69,000 lbs. @ $6.10 per lb.) Direct labor (22,800 hrs.@ $12.30 per hr.) Overhead costs $420,900 280,440 21,600 82,260 Indirect materials Indirect labor 23,100 46,800 24,000 75,000 16,500 Power Repairs and maintenance Depreciation-building Depreciation-machinery Tax and insurance 66,000 355,260 Supervision 1,056,600 Total costs 2. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. (Round your variable amount per unit answers to 2 decimal places. Omit the "$" sign in your response.) KWIKEZE COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Variable Amount Total Fixed Cost Flexible Budget Flexible Budget for Unit Salesfor Unit Sales of 13,000 Flexible Budget for Unit Sales of 17,000 of 15,000 per Unit Variable overhead costs (Click to select) (Click to select) (Click to select) (Click to select) Total variable costs Fixed overhead costs (Click to select) (Click to select) (Click to select) (Click to select) Total fixed costs Total overhead costs

Answer 1

2) Flexible Overhead Budget KWIKEZE COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Flexible Budget Flexible Budget Flexible Budget Variable Amount Total for Unit Sales of for Unit Sales of for Unit Sales of Fixed Cost 13.000 15,000 17,000 per Unit Variable overhead costs: Indirect materilas (S22,500/20,000 units S1.125) ($1.125 13,000 units); ($1.125*15,000 units); (S1.125*17,000 Indirect labor ($90.000/20,000 units = $4.5) ($4.5*13,000 units); (S4.5*15,000 units); (S4.5*17,000 units) Power (S22,500/20,000 units S1.125) (S1.125*13,000 units); (S1.125*15,000 units); (S1.125*17,000 units) $1.125 $19,125 S14,625 S16,875 S4.50 S58,500 S67,500 S76,500 $1.125 $19,125 S14,625 S16,875 Repairs and maintenance (S45,000/20,000 S2.25) $2.25 $29,250 (S2.25 13.000 units) (S2.25*15.000 units) (S2.25 17.000 units $33,750 $38,250 $117,000 $135,000 Total variable overhead costs (a) S153,000

Fixed overhead costs: $24,000 eciation - buildin $24,000 $24,000 $24,000 $72,000 $72,000 $72,000 $72,000 eciation - mac Tax and insurance $18,000 $18,000 $18,000 $18,000 Supervision $66.000 S66,000 $66.000 S66,000 Total fixed overhead costs (b) $180,000 $180,000 $180,000 $180,000 Total overhead costs (a +b) $297,000 S315,000 S333,000

Note: Fixed costs remain unchanged even there is increase in the units sold.