Question

Factory Overhead Cost Budget

Sweet Tooth Company budgeted the following costs for anticipated production for August:

Advertising expenses	$258,640
Manufacturing supplies	14,180
Power and light	42,280
Sales commissions	279,430
Factory insurance	24,620
Production supervisor wages	124,350
Production control wages	32,330
Executive officer salaries	263,610
Materials management wages	35,550
Factory depreciation	20,140

Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only fixed factory costs.

Sweet Tooth Company
Factory Overhead Cost Budget
For the Month Ending August 31
Variable factory overhead costs:
	$
Total variable factory overhead costs		$
Fixed factory overhead costs:
	$
Total fixed factory overhead costs
Total factory overhead costs		$

Answer 1

Solution:
	Sweet Tooth Candy Company
	Factory Overhead Cost Budget
	For the Month Ending August 31
	Variable factory overhead costs:
	Manufacturing supplies	14,180
	Power and light	42,280
	Production supervisor wages	124,350
	Production control wages	32,330
	Materials management wages	35,550
	Total variable factory overhead costs		248,690
	Fixed factory overhead costs:
	Factory insurance	24,620
	Factory depreciation	20,140
	Total fixed factory overhead costs		44,760
	Total factory overhead costs		293,450
Notes:	Factory overhead cost budget is prepared for management of factory costing and factory work flow management by making available needed arrangement as required in budget. This question does not require any explanation as , it is just format based question means plugging data in given format.
Working Notes:
Notes:	Advertising expenses, Sales commissions & Executive officer salaries are not of Factory overhead, they are included in Income statement . They are not part direct expenses for manufacturing activities. In Factory overhead cost budget only included cost directly related to manufacturing of products, not of sales or operation or administration.
	Sweet Tooth Candy Company
	Factory Overhead Cost Budget
	For the Month Ending August 31
	Variable factory overhead costs:
A	Manufacturing supplies	14,180
B	Power and light	42,280
C	Production supervisor wages	124,350
D	Production control wages	32,330
E	Materials management wages	35,550
F=A+B+C+D+E	Total variable factory overhead costs		248,690
	Fixed factory overhead costs:
G	Factory insurance	24,620
H	Factory depreciation	20,140
I=G+H	Total fixed factory overhead costs		44,760
J=I+F	Total factory overhead costs		293,450
Please feel free to ask if anything about above solution in comment section of the question.