Sweet Tooth Candy Company budgeted the following costs for anticipated productio

Question

Sweet Tooth Candy Company budgeted the following costs for anticipated production for August: Advertising expenses $241,440 Manufacturing supplies 13,230 Power and light 39,470 Sales commissions 269,940 Factory insurance 22,980 Production supervisor wages 116,080 Production control wages 30,180 Executive officer salaries 246,080 Materials management wages 33,190 Factory depreciation 18,810 Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only fixed factory costs.

Explanation / Answer

Factory overhead cost budget:

Variable factory overhead costs: Manufacturing supplies $13,230 Power and light $39,470 Production supervisory wages $116,080 Production control wages $30,180 Material management wages $33,190 Total variable factory overhead costs $232,150 Fixed factory overhead costs: Factory insurance $22,980 Factory depriciation $18,810 Total fixed factory overhead costs $41,790 Total factory overhead costs $273,940

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