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Cerium Inc. produces a variety of household cleaning products. Cerium's controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed
Cerium Inc. produces a variety of household cleaning products. Cerium's controller has developed standard costs for the following four overhead items:
Overhead Item | Total Fixed Cost | Variable Rate per Direct Labor Hour |
---|---|---|
Maintenance | $ 113,000 | $0.20 |
Power | 0.68 | |
Indirect labor | 140,000 | 3.70 |
Rent | 35,000 |
Next year, Cerium expects production to require 58,000 direct labor hours.
Required:
Question Content Area
1. Prepare an overhead budget for the expected level of direct labor hours for the coming year.
Line Item Description | Rate per Hour | Activity Level 58,000 Hours |
---|---|---|
Variable costs: | ||
Maintenance | $Maintenance | $Maintenance |
Power | Power | Power |
Indirect labor | Indirect labor | Indirect labor |
Total variable cost | blank | $Total variable cost |
blank | blank | blank |
Fixed costs: | blank | blank |
Maintenance | blank | $Maintenance |
Indirect labor | blank | Indirect labor |
Rent | blank | Rent |
Total fixed costs | blank | $Total fixed costs |
Total overhead costs | blank | $Total overhead costs |
Question Content Area
2. Prepare an overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected.
Line Item Description | Rate per Hour | Activity Level fill in the blank 1 of 23 Hours | Activity Level fill in the blank 2 of 23 Hours |
---|---|---|---|
Variable costs: | |||
Maintenance | fill in the blank 3 of 23$ | fill in the blank 4 of 23$ | fill in the blank 5 of 23$ |
Power | fill in the blank 6 of 23 | fill in the blank 7 of 23 | fill in the blank 8 of 23 |
Indirect labor | fill in the blank 9 of 23 | fill in the blank 10 of 23 | fill in the blank 11 of 23 |
Total variable costs | fill in the blank 12 of 23$ | fill in the blank 13 of 23$ | |
Fixed costs: | |||
Maintenance | $ fill in the blank 14 of 23 | $ fill in the blank 15 of 23 | |
Indirect labor | fill in the blank 16 of 23 | fill in the blank 17 of 23 | |
Rent | fill in the blank 18 of 23 | fill in the blank 19 of 23 | |
Total fixed costs | fill in the blank 20 of 23$ | fill in the blank 21 of 23$ | |
Total overhead costs | fill in the blank 22 of 23$ | fill in the blank 23 of 23$ |
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