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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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