Question
In: Accounting
Kerekes Manufacturing Corporation has prepared the following overhead budget for next month. Activity level 3,100 machine-hours...
Kerekes Manufacturing Corporation has prepared the following overhead budget for next month. Activity level 3,100 machine-hours Variable overhead costs: Supplies $ 15,810 Indirect labor 27,900 Fixed overhead costs: Supervision 17,000 Utilities 6,500 Depreciation 7,500 Total overhead cost $ 74,710 The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 3,000 machine-hours rather than 3,100 machine-hours? Multiple Choice $72,650 $72,300 $73,300 $74,710
Solutions
Expert Solution
| The correct answer is $73,300 which is calculated as below:- | |||||
| Variable overhead cost per 3,100 machine hours | |||||
| Supplies | 15,810 | 3,100 | 5.10 | Per machine hours | |
| Indirect labor | 27,900 | 3,100 | 9.00 | Per machine hours | |
| Hence, variable overhead cost for 3,000 machine hours | |||||
| Supplies | 5.10 | 3,000 | 15,300 | ||
| Indirect labor | 9.00 | 3,000 | 27,000 | ||
| Total variable overhead cost | 42,300 | ||||
| Add : Fixed cost | |||||
| Supervision | 17,000 | ||||
| utilities | 6,500 | ||||
| Depreciation | 7,500 | 31,000 | |||
| Total budgeted overhead cost | 73,300 | ||||
ekkarill92 answered 1 year agoRelated Solutions
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