Variable costs Rate per Direct Labor Hour Annual Fixed Costs (a) & (b) ZELMER CO
ID: 2405263 • Letter: V
Question
Variable costs
Rate per Direct
Labor Hour
Annual Fixed Costs
(a) & (b)
ZELMER COMPANY
Monthly Manufacturing Overhead Flexible Budget
Ironing Department
For the Year 2017
Variable costs
Rate per Direct
Labor Hour
Annual Fixed Costs
Indirect labor $0.40 Supervision $47,040 Indirect materials 0.54 Depreciation 20,280 Factory utilities 0.30 Insurance 12,480 Factory repairs 0.23 Rent 30,000The master overhead budget was prepared on the expectation that 482,200 direct labor hours will be worked during the year. In June, 43,100 direct labor hours were worked. At that level of activity, actual costs were as shown below.
Variable—per direct labor hour: indirect labor $0.42, indirect materials $0.51, factory utilities $0.33, and factory repairs $0.28.
Fixed: same as budgeted.
Explanation / Answer
Solution a:
Solution b:
Zelmer Company Monthly Manufacturing Overhead Flexible Budget For the year 2017 Particulars DLH - 40900 DLH - 45100 DLH - 49300 DLH - 53500 Direct Labor hours 40900 45100 49300 53500 Variable Costs: Indirect labor $16,360.00 $18,040.00 $19,720.00 $21,400.00 Indirect Materials $22,086.00 $24,354.00 $26,622.00 $28,890.00 Factory Utilities $12,270.00 $13,530.00 $14,790.00 $16,050.00 Factory repairs $9,407.00 $10,373.00 $11,339.00 $12,305.00 Total Variable overhead cost $60,123.00 $66,297.00 $72,471.00 $78,645.00 Fixed overhead costs: Supervision $3,920.00 $3,920.00 $3,920.00 $3,920.00 Depreciation $1,690.00 $1,690.00 $1,690.00 $1,690.00 Insurance $1,040.00 $1,040.00 $1,040.00 $1,040.00 Rent $2,500.00 $2,500.00 $2,500.00 $2,500.00 Total Fixed overhead cost $9,150.00 $9,150.00 $9,150.00 $9,150.00 Total Overhead Cost $69,273.00 $75,447.00 $81,621.00 $87,795.00Related Questions
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