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Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press...

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 13,000 hours of productive capacity in the department:

Variable overhead cost:
   Indirect factory labor $118,300
   Power and light 4,030
   Indirect materials 32,500
      Total variable overhead cost $154,830
Fixed overhead cost:
   Supervisory salaries $54,190
   Depreciation of plant and equipment 34,060
   Insurance and property taxes 21,680
      Total fixed overhead cost 109,930
Total factory overhead cost $264,760

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 11,000, 13,000, and 15,000 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 11,000 13,000 15,000
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 $ $ $

Solutions

Expert Solution

Leno Manufacturing Company
Factory Overhead Cost Budget-Press Department
For the Month Ended November 30
Direct Labour Hours 11000 ?13000 15000
Variable Overheard Cost:
Indirect Factory Labour $100100 $118300 $136500
Power & Light $3410 $4030 $4650
Indirect Materials $27500 $32500 $37500
Total Variable Factory Overhead $131010 $154830 $178650
Fixed Factory Overhead Cost:
Supervisory Salaries $54190 $54190 $54190
Depreciation of plant and equipment $34060 $34060 $34060
Insurance and property taxes $21680 $21680 $21680
Total Fixed Factory Overhead $109930 $109930 $109930
Total Factory Overhead $240940 $264760 $288580

Working Note

1. Calculation of variable cost per labour hours and variable cost for 11000 hours and 15000 hours
Sno Particulars Amount
1 Direct labours hours 13000
2 Indirect factory labour 118300
3 Indirect factory labour per labour hours(2/1) 9.1
4 Power and Light 4030
5 Power and Light per labour hours (4/1) 0.31
6 Indirect Materials 32500
7 Indirect Materials per labour hours(6/1) 2.5
8 Indirect factory labour for 11000 hours (11000*9.1) 100100
9 Indirect factory labour for 15000 hours (15000*9.1) 136500
10 Power and Light for 11000 hours (11000*0.31) 3410
11 Power and Light for 15000 hours (15000*0.31) 4650
12 Indirect Materials for 11000 hours (11000*2.5) 27500
13 Indirect Materials for 15000 hours (15000*2.5) 37500

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