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 18,000 hours of productive capacity in the department:

Variable overhead cost:
Indirect factory labor	$165,600
Power and light	5,760
Indirect materials	46,800
Total variable overhead cost		$218,160
Fixed overhead cost:
Supervisory salaries	$76,360
Depreciation of plant and equipment	48,000
Insurance and property taxes	30,540
Total fixed overhead cost		154,900
Total factory overhead cost		$373,060

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 16,000, 18,000, and 20,000 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	16,000	18,000	20,000
Variable overhead cost:
Indirect factory labor	$	$	$
Power and light
Indirect materials
Total variable factory overhead	$	$	$
Fixed factory overhead cost:
Supervisory salaries	$	$	$
Depreciation of plant and equipment
Insurance and property taxes
Total fixed factory overhead	$	$	$
Total factory overhead cost	$	$	$

Answer 1

Leno Manufacturing Company
Factory Overhead Cost Budget-Press Department
For the Month Ended November 30
Direct labor hours	16,000	18,000	20,000
Variable overhead cost:
Indirect factory labor	147,200	165,600	184,000
Power and light	5,120	5,760	6,400
Indirect materials	41,600	46,800	52,000
Total variable factory overhead	193,920	218,160	242,400
Fixed factory overhead cost:
Supervisory salaries	76,360	76,360	76,360
Depreciation of plant and equipment	48,000	48,000	48,000
Insurance and property taxes	30,540	30,540	30,540
Total fixed factory overhead	154,900	154,900	154,900
Total factory overhead cost	348,820	373,060	397,300