Question

Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2013:



During 2013, Bluecap worked 28,000 direct labor hours and manufactured 9,600 units. The actual factory overhead was $14,000 greater than the flexible budget amount for the units produced, of which $6,000 was due to fixed factory overhead. In preparing a budget for 2014 Bluecap decided to raise the level of operation to 90% of capacity, to manufacture 9,000 units at a budgeted total of 27,000 direct labor hours.

The total budget for fixed factory overhead in 2013 for Bluecap Co. was:

		$230,400.
		$259,200.
		$265,200.
		$276,480.
		$288,000.

Answer 1

In 2013 Blue Cap Worked For 28,000 Direct Labour Hours and manufactured 9600 units.It is actual data for 2013

In 2014 Blue Cap Budgeted For 27,000 Direct Labour Hours for Budgeted 9,000 Units.

Therfore,according to Budget:- Budgeted direct Labour Hrs Required for 9600 units(for actual units) is

=27,000/9000*9500 units

=28,800 Budgted hours for 9000 units

It takes,28,000 hrs for actual production.

(28,800-28,000)X=$800

X=$10

Therfore,Budgeted fixed factory overhead for 2013 are:-

=28,800*$10

=$2,88,000