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 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	$

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