Question

Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press...

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 8,000 hours of productive capacity in the department:

Variable overhead cost:
   Indirect factory labor $70,400
   Power and light 3,520
   Indirect materials 17,600
      Total variable overhead cost $91,520
Fixed overhead cost:
   Supervisory salaries $32,030
   Depreciation of plant and equipment 20,130
   Insurance and property taxes 12,810
      Total fixed overhead cost 64,970
Total factory overhead cost $156,490

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 6,000, 8,000, and 10,000 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 6,000 8,000 10,000
Variable overhead cost:
Indirect factory labor $ $ $
Power and light
Indirect materials
Total variable factory overhead $ $ $
Fixed factory overhead cost:
Supervisory salaries $ $ $
Depreciation of plant and equipment
Insurance and property taxes
Total fixed factory overhead $ $ $
Total factory overhead $ $

$

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------================================

2- The following data relate to factory overhead cost for the production of 4,000 computers:

Actual: Variable factory overhead $142,600
Fixed factory overhead 31,500
Standard: 4,000 hrs. at $42 168,000

If productive capacity of 100% was 6,000 hours and the total factory overhead cost budgeted at the level of 4,000 standard hours was $178,500, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $5.25 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Variance Amount Favorable/Unfavorable
Controllable variance $
Volume variance $
Total factory overhead cost variance $

Homework Answers

Answer #1
LENO MANUFACTURING COMPANY
FACTORY OVERHEADS COST BUDGET:
FOR THE MONTH OF NOVEMBER
Direct Labour hours 6000 8000 10000
Variable Overheads cost:
Indirect factory labour 52800 70400 88000
Power and light 2640 3520 4400
Indirect material 13200 17600 22000
Total Variable Factory OH 68640 91520 114400
Fixed factory Overheads:
Supervisor Ssalaries 32030 32030 32030
Depreciation 20130 20130 20130
Insurance and prperty tax 12810 12810 12810
Total fixed factory Overheads 64970 64970 64970
Total Factory Overheads 133610 156490 179370
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