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 $90,000 Power and light 3,200 Indirect materials 25,000 Total variable overhead cost $118,200 Fixed overhead cost: Supervisory salaries $41,370 Depreciation of plant and equipment 26,000 Insurance and property taxes 16,550 Total fixed overhead cost 83,920 Total factory overhead cost $202,120 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 $ $ $

Answer 1

First of all we will find per unit variable cost as under

Variable overhead cost:	Total	Divided by units	Per unit
Indirect factory labor	90,000	10,000	9
Power and light	3200	10,000	0.32
Indirect materials	25000	10,000	2.5

Now we will prepare the   Leno Manufacturing Company Factory Overhead Cost Budget-Press Department as under

Leno Manufacturing Company
Factory Overhead Cost Budget—Press Department
For the Month Ended November
Direct labor hours	8000	10,000	12,000
Variable overhead cost:
Indirect factory labor (9xDirect labor hours)	72000	90000	108000
Power and light (0.32x Direct labor hours)	2560	3200	3840
Indirect materials (2.5x Direct labor hours)	20000	25000	30000
Total variable factory overhead (A)	94560	118200	141840
Fixed factory overhead cost:
Supervisory salaries	41370	41370	41370
Depreciation of plant and equipment	26000	26000	26000
Insurance and property taxes	16550	16550	16550
Total fixed factory overhead (B)	83920	83920	83920
Total factory overhead(A+B)	178480	202120	225760