(b) For total cost I got 85725 but it is wrong. The manufacturing overhead budge
ID: 2535637 • Letter: #
Question
(b)
For total cost I got 85725 but it is wrong.
The manufacturing overhead budget for Fleming Company contains the following items.Variable costs Fixed costs Indirect materials $26,000 Supervision $20,100 Indirect labor 14,200 Inspection costs 1,200 Maintenance expense 11,800 Insurance expense 2,400 Manufacturing supplies 7,100 Depreciation 17,700 Total variable $59,100 Total fixed $41,400
The budget was based on an estimated 2,360 units being produced. During the past month, 1,770 units were produced, and the following costs incurred.
Variable costs Fixed costs Indirect materials $26,600 Supervision $21,700 Indirect labor 15,900 Inspection costs 1,400 Maintenance expense 9,700 Insurance expense 2,600 Manufacturing supplies 5,900 Depreciation 17,300 Total variable $58,100 Total fixed $43,000
Explanation / Answer
Budgeted variable cost per unit = $59,100 / 2,360 units = $25.04 per unit.
Expense should have been spent during the month for the manufacture of the 1,770 units :
Budgeted total variable cost + Budgeted total fixed cost
= (1,770 units * $25.04 per unit.) + $41,400
= $43220.80 + $41,400 = $85,720.80 or $85,721
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