Flexible Overhead Budget Carson Wood Products Company prepared the following fac

Question

Flexible Overhead Budget

Carson Wood Products Company prepared the following factory overhead cost budget for the Press Department for April 2014, during which it expected to require 9,000 hours of productive capacity in the department:

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 7,000, 9,000, and 11,000 hours of production. Round your interim computations to the nearest cent, if required. Enter all amounts as positive numbers.

Carson Wood Products Company

Factory Overhead Cost Budget-Press Department

For the Month Ended May 31, 2014

Direct labor hours

7,000

9,000

11,000

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

$

$

$

Variable overhead cost:    Indirect factory labor $74,700    Power and light 3,510    Indirect materials 29,700       Total variable cost $107,910 Fixed overhead cost:    Supervisory salaries $37,770    Depreciation of plant and equipment 23,740    Insurance and property taxes 15,110       Total fixed cost 76,620 Total factory overhead cost $184,530

Explanation / Answer

Factory overhead cost budget - Press Department

Direct labor hours 7,000 9,000 11,000 Variable overhead cost Indirect factory labor 58,100 74,700 91,300 Power & Light 2,730 3,510 4,290 Indirect materials 23,100 29,700 36,300 Total variable factory overheads 83,930 107,910 131,890 Fixed factory overhead cost Supervisory salaries 37,770 37,770 37,770 Depreciation of plant and equipment 23,740 23,740 23,740 Insurance and property taxes 15,110 15,110 15,110 Total fixed factory overhead cost 76,620 76,620 76,620 Total factory overhead cost 160,550 184,530 208,510

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