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 to require 9,000 hours of productive capacity in the department:

Variable overhead cost:
Indirect factory labor	$81,900
Power and light	3,870
Indirect materials	25,200
Total variable overhead cost		$110,970
Fixed overhead cost:
Supervisory salaries	$38,840
Depreciation of plant and equipment	24,410
Insurance and property taxes	15,540
Total fixed overhead cost		78,790
Total factory overhead cost		$189,760

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	7,000	9,000	11,000
Variable overhead cost: 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 to require 9,000 hours of productive capacity in the department: Variable overhead cost:    Indirect factory labor $81,900    Power and light 3,870    Indirect materials 25,200       Total variable overhead cost $110,970 Fixed overhead cost:    Supervisory salaries $38,840    Depreciation of plant and equipment 24,410    Insurance and property taxes 15,540       Total fixed overhead cost 78,790 Total factory overhead cost $189,760 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 7,000 9,000 11,000 Variable overhead cost:

Answer 1

• Workings

Variable overhead cost:	Total	Per hour based on 7000 DLHs
Indirect factory labor	$81,900	$                                        11.70
Power and light	$3,870	$                                          0.55
Indirect materials	$25,200	$                                          3.60

• Requirement

Leno Manufacturing Company
Factory Overhead Cost Budget-Press Department
For the Month Ended November 30
Direct labor hours	7,000	9,000	11,000
Variable overhead cost:
Indirect factory labor at $ 11.70	$81,900	$105,300	$128,700
Power and light at $ 0.55	$3,870	$4,950	$6,050
Indirect materials at $ 3.60	$25,200	$32,400	$39,600
Total variable overhead cost	$110,970	$142,650	$174,350
Fixed overhead cost:
Supervisory salaries	$38,840	$38,840	$38,840
Depreciation of plant and equipment	$24,410	$24,410	$24,410
Insurance and property taxes	$15,540	$15,540	$15,540
Total fixed overhead cost	$78,790	$78,790	$78,790
Total factory overhead cost	$189,760	$221,440	$253,140