Question

Flexible Overhead Budget

Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 14,000 hours of productive capacity in the department:

Variable overhead costs:
Indirect factory labor	$124,600
Power and light	4,900
Indirect materials	46,200
Total variable overhead cost		$175,700
Fixed overhead costs:
Supervisory salaries	$61,490
Depreciation of plant and equipment	38,650
Insurance and property taxes	24,600
Total fixed overhead cost		124,740
Total factory overhead cost		$300,440

Assuming that the estimated costs for November are the same as for October, prepare a flexible factory overhead cost budget for the Press Department for November for 12,000, 14,000, and 16,000 hours of production. Round your interim computations to the nearest cent, if required. Enter all amounts as positive numbers.

Leno Manufacturing Company
Factory Overhead Cost Budget-Press Department
For the Month Ended November 30
Direct labor hours	12,000	14,000	16,000
Variable overhead costs:
Indirect factory labor	$	$	$
Power and light
Indirect materials
Total variable factory overhead	$	$	$
Fixed factory overhead costs:
Supervisory salaries	$	$	$
Depreciation of plant and equipment
Insurance and property taxes
Total fixed factory overhead	$	$	$
Total factory overhead	$	$	$

Answer 1

• Requirement

Leno Manufacturing Company
Factory Overhead Cost Budget-Press Department
For the Month Ended November 30
Direct labor hours	12,000	14,000	16,000
Variable overhead costs:
Indirect factory labor	$106,800	$124,600	$142,400
Power and light	$4,200	$4,900	$5,600
Indirect materials	$39,600	$46,200	$52,800
Total variable factory overhead	$150,600	$175,700	$200,800
Fixed factory overhead costs:
Supervisory salaries	$61,490	$61,490	$61,490
Depreciation of plant and equipment	$38,650	$38,650	$38,650
Insurance and property taxes	$24,600	$24,600	$24,600
Total fixed factory overhead	$124,740	$124,740	$124,740
Total factory overhead	$275,340	$300,440	$325,540

--Working for Variable cost

Direct labor hours	12000	14000	16000
Variable overhead costs:
Indirect factory labor	=124600*12000/14000	=124600*14000/14000	=124600*16000/14000
Power and light	=4900*12000/14000	=4900*14000/14000	=4900*16000/14000
Indirect materials	=46200*12000/14000	=46200*14000/14000	=46200*16000/14000