Carson Wood Products Company prepared the following factory overhead cost budget

Question

Carson Wood Products Company prepared the following factory overhead cost budget for the Press Department for April 2014, during which it expected to require 13,000 hours of productive capacity in the department: Variable overhead cost: Indirect factory labor Power and light Indirect materials $101,400 5,070 39,000 Total variable cost Fixed overhead cost: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes $50,910 32,000 20,370 Total fixed cost 103,280 Total factory overhead cost $248,750

Explanation / Answer

Direct labor hour Rate per hour (A) 11000 13000 15000 Variable overhead cost Indirect labor 101400/13000= 7.80 85800 [11000*7.8] 101400 117000 Power and light 5070/13000 = .39 4290    [11000*.39] 5070 5850 Indirect material 39000/13000=3 33000    [11000*3] 39000 45000 Total variable factory overhead 123090 145470 167850 Fixed factory overhead Supervisor salaries 50910 50910 50910 Depreciation of palnt and equipment 32000 32000 32000 Insurance and property taxes 20370 20370 20370 Total fixed factory overhead 103280 103280 103280 Total factory overhead 226370 248750 271130

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