how do I figure out the variable overhead cost Determine the direct materials qu

Question

how do I figure out the variable overhead cost

Determine the direct materials quant ity and direct labor 1. 4 Total factory erhead. 12.000 t EX 7-14 Flexible overhead budget Carson Wood Products Company prepa the Press Depar ts Company prepared the following factory overhead co 5218,760 tment for April 2012, during which it expected to require 10,000 of productive capacity in the department Variable overhead cost: Indirect factory labor Power and light Indirect materials 83,000 3,800 28,000 Total variable cost Fixed overhead cost: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes $40,000 25,000 Total fixed cost Total factory overhead cost 81,000 $195,800 Assuming that the estimated costs for May are the same as for April, prepare a flexible factory overhead cost budget for the Press Department for May for 8,000, 10,000, an 12,000 hours of production.

Explanation / Answer

8000 hrs

Note:- Fixed costs will be the same for all level of production hrs. , but variable cost will keep changing according to production hrs.

8000 hrs

10000 hrs 12000 hrs variable overhead cost : indirect factory labor 66400 [83000 / 10000*8000] 83000 99600 Power and light 3040 [3800 / 10000*8000 3800 4560 Indirect material 22400 [ 28000 / 10000*8000 28000 33600 Total variable cost $91840 $114800 $137760 Fixed overhead cost supervision salary 40000 40000 40000 Depreciation of plant and equipment 25000 25000 25000 Insurance and property tax 16000 16000 16000 Total fixed cost $81000 $81000 $81000 Total factory overhead cost $172840 $195800 $218760

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