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 10,000 hours of productive capacity in the department:

Variable overhead cost:
Indirect factory labor	$86,000
Power and light	4,100
Indirect materials	31,000
Total variable overhead cost		$121,100
Fixed overhead cost:
Supervisory salaries	$42,390
Depreciation of plant and equipment	26,640
Insurance and property taxes	16,950
Total fixed overhead cost		85,980
Total factory overhead cost		$207,080

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 8,000, 10,000, and 12,000 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	8,000	10,000	12,000
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

Solution

Leno Manufacturing Company
Factory Overhead Cost Budget-Press Department
For the Month Ended November 30
Direct labor hours	8,000	10,000	12,000
Variable overhead cost:
Indirect factory labor	$   68,800.00	$   86,000.00	$ 103,200.00
Power and light	$    3,280.00	$    4,100.00	$     4,920.00
Indirect materials	$   24,800.00	$   31,000.00	$   37,200.00
Total variable factory overhead	$   96,880.00	$ 121,100.00	$ 145,320.00
Fixed factory overhead cost:
Supervisory salaries	$   42,390.00	$   42,390.00	$   42,390.00
Depreciation of plant and equipment	$   26,640.00	$   26,640.00	$   26,640.00
Insurance and property taxes	$   16,950.00	$   16,950.00	$   16,950.00
Total fixed factory overhead	$   85,980.00	$   85,980.00	$   85,980.00
Total factory overhead cost	$ 182,860.00	$ 207,080.00	$ 231,300.00