Question

Venus Candy Company budgeted the following costs for anticipated production for July 2016:

Advertising expenses	$292,250
Manufacturing supplies	16,020
Power and light	47,770
Sales commissions	319,330
Factory insurance	27,820
Production supervisor wages	140,510
Production control wages	36,530
Executive officer salaries	297,870
Materials management wages	40,180
Factory depreciation	22,760

Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only fixed factory costs.

Venus Candy Company
Factory Overhead Cost Budget
For the Month Ending July 31, 2016
Variable factory overhead costs:
	$
Total variable factory overhead costs		$
Fixed factory overhead costs:
	$
Total fixed factory overhead costs
Total factory overhead costs		$

Answer 1

Variable factory overhead

Manufacturing supplies $ 16,020

Power and light $ 47,770

Production supervisor salaries $ 1,40,510

Production control wages $ 36,530

Materials management wages $ 40,180

Total variable factory overhead costs $ 2,81,010

Factory depreciation $ 22,760

Factory insurance $ 27,820

Total fixed factory overhead costs $ 50,580

Total factory overhead costs $ 3,31,590

Explanation for other cost items:

Advertising and sales commission is part of sellilng overhead, not factory overhead.

Executive officer salaries is part of administrative expenses.