Question

Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected Department for October of the current year, during which it expected to require 9,000 hours of productive capacity in the department: Variable overhead cost: Indirect factory labor $88,200 Power and light 2,610 Indirect materials 26,100 Total variable overhead cost $116,910 Fixed overhead cost: Supervisory salaries $40,920 Depreciation of plant and equipment 25,720 Insurance and property taxes 16,370 Total fixed overhead cost 83,010 Total factory overhead cost $199,920 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 7,000, 9,000, and 11,000 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 9,000 Variable overhead cost: Indirect factory labor 7,000 11,000 Power and light Indirect materials Total variable factory overhead Fixed factory overhead cost: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes Quod 0000 LUUUUUUUU QUI 0001 Total fixed factory overhead Total factory overhead cost

Answer 1

Computation of per hour labour Rate (Variable Overheads) Particulars Indirect factory Labour Power and light Indirect Materials Amounts (a) 88,200 2,610 26,100 1,16,910 Per hour cost (a/9000) 9.80 0.29 2.90 12.99 Fixed Overheads will remain unchanged in all the cases 11,000 Leno Manufacturing Company Factory Overhead Cost Budget- Press Department for the Month ended November 30 Direct Labour Hours 7,000 9,000 Variable Overhead cost: Indirect Factory labour (hours x $9.80) 68,600 88,200 Power and Light (hours x $0.29) 2,030 2,610 Indirect Material (hours x $2.90) 20,300 26,100 A. Total Variable Factory Overhead 90,930 1,16,910 1,07,800 3,190 31,900 1,42,890 Fixed factory overhead cost: Supervisory salaries Depreciation of plant & equipment Insurance and property taxes B. Total fixed factory Overhead 40,920 25,720 16,370 83,010 40,920 25,720 16,370 83,010 40,920 25,720 16,370 83,010 Total fixed Overhead cost (A+B) $ 1,73,940 $ 1,99,920 $ 2,25,900

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