Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department

Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October 2014, during which it expected to require 20,000 hours of productive capacity in the department:


Variable overhead cost:
Indirect factory labor $180,000
Power and light12,000
Indirect materials  64,000
Total variable overhead cost $256,000
Fixed overhead cost:
Supervisory salaries $ 80,000
Depreciation of plant and equipment 50,000
Insurance and property taxes   32,000
Total fixed overhead cost 162,000
Total factory overhead cost $418,000






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 18,000, 20,000, and 22,000 hours of production.

Answer:


LENO MANUFACTURING COMPANY 
Factory Overhead Cost Budget—Press Department 
For the Month Ended November 30, 2014 
Direct labor hours 18,000 20,000 22,000 
Variable overhead cost:    
Indirect factory labor $162,0001
 P
ower and light 10,800
2 I
ndirect materials 57,6003
 T
otal variable factory overhead $230,400 $256,000 $281,600 
Fixed factory overhead cost:    
Supervisory salaries $  80,000 $  80,000 $  80,000 
Depreciation of plant and equipment 50,000 50,000 50,000 
Insurance and property taxes 32,000 32,000 32,000 
Total fixed factory overhead $162,000 $162,000 $162,000 
Total factory overhead $392,400 $418,000 $443,600 
    
18,000 × ($180,000 ÷ 20,000) 
18,000 × ($12,000 ÷ 20,000) 
18,000 × ($64,000 ÷ 20,000)