Question

Unkar Plutt Inc., is a recycling shop that reworks junk into artwork. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of budgeted machine-hours. In 2016, budgeted fixed manufacturing overhead cost was $17,000,000. Budgeted variable manufacturing overhead was $10 per machine-hour. The denominator level was 1,000,000 machine-hours.
Required:
1. Prepare a graph for variable manufacturing overhead and fixed manufacturing overhead. The graph should display how Unkar Plutt Inc., variable and fixed manufacturing overhead costs will be depicted for the purposes of:
(a) planning and control
(b) inventory costing.

Answer 1

ANSWER

Prepare a graph for variable manufacturing overhead and fixed manufacturing overhead.

Budgeted variable manufacturing overhead was $10 per machine-hour

1

Now we will prepare the graph for Variable Manufacturing Overhead Costs

2

Budgeted fixed manufacturing over head per hour

= Budgeted fixed manufacturing over head / Denominator level

=$17,000,000 / 1,000,000 machine hours

=$17 per machine hour

Now we will prepare the graph for Fixed Manufacturing Overhead Costs

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