Venus Candy Company budgeted the following costs for anticipated production for
ID: 2527849 • Letter: V
Question
Venus Candy Company budgeted the following costs for anticipated production for July 2016:
Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only fixed factory costs.
Advertising expenses $292,250 Manufacturing supplies 16,020 Power and light 47,770 Sales commissions 319,330 Factory insurance 27,820 Production supervisor wages 140,510 Production control wages 36,530 Executive officer salaries 297,870 Materials management wages 40,180 Factory depreciation 22,760Explanation / Answer
Variable factory overhead
Manufacturing supplies $ 16,020
Power and light $ 47,770
Production supervisor salaries $ 1,40,510
Production control wages $ 36,530
Materials management wages $ 40,180
Total variable factory overhead costs $ 2,81,010
Factory depreciation $ 22,760
Factory insurance $ 27,820
Total fixed factory overhead costs $ 50,580
Total factory overhead costs $ 3,31,590
Explanation for other cost items:
Advertising and sales commission is part of sellilng overhead, not factory overhead.
Executive officer salaries is part of administrative expenses.
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