Question

# Kerekes Manufacturing Corporation has prepared the following overhead budget for next month. Activity level 2,600 machine-hours...

Kerekes Manufacturing Corporation has prepared the following overhead budget for next month.

 Activity level 2,600 machine-hours Variable overhead costs: Supplies \$ 11,960 Indirect labor 22,100 Fixed overhead costs: Supervision 15,600 Utilities 6,000 Depreciation 7,000 Total overhead cost \$ 62,660

The company's variable overhead costs are driven by machine-hours.

What would be the total budgeted overhead cost for next month if the activity level is 2,500 machine-hours rather than 2,600 machine-hours?

Multiple Choice

\$60,750

\$60,250

\$61,350

\$62,660

.

Petrus Framing's cost formula for its supplies cost is \$1,810 per month plus \$8 per frame. For the month of March, the company planned for activity of 621 frames, but the actual level of activity was 628 frames. The actual supplies cost for the month was \$6,970. The activity variance for supplies cost in March would be closest to:

Multiple Choice

\$192 F

\$56 F

\$56 U

\$192 U

 KEREKES MANUFACTURING CORPORATION: Total overhead budget for 2500 hours: Variable overhead = (11960+22100)*25000/26000 = \$     32,750 Fixed overhead = 15600+6000+7000 = \$     28,600 Total overhead budget \$     61,350 PETRUS FARMING: Activity variance = (Actual activity level-Planned Activity level)*Variable cost per activity unit = (628-621)*8 = \$       56.00 U

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