CORNERSTONE 3.3 (continued) Indirect Plant and Labor Supervisory Equipment Cost Utilities Purchasing Salaries Depreciation July 514.250 S12.000 $ 38,200 5 20,000 5 6.500 August 15.800 10.600 35.400 23.000 6,500 September 16.800 12.500 37,600 32.000 6.500 October 20,700 12.500 40.200 27.800 6.500 November 20.000 12.500 39.900 25,400 December 17.000 12.500 39.700 13,000 Total 5104350 572.600 5231.000 $145.200 $39.000 Information on machine hours, number of moves, and number of purchase orders for the six-month period follows Number of Machine Hours Purchase Orders Mones (Mr) (PO) July 340 5,400 250 August 380 5.200 300 September 3.800 450 October 300 6.200 380 November 480 6.000 340 December 420 5,600 200 Total 2.520 34,200 1.920 right Why: By separating accounts with primarily fixed costs from those with primarily vari- able costs, and associating the variable costs with relevant drivers, it is possible to determine cost beluvior and use it in budgeting performance evaluation, and de cision making Required: 1. Why did the controller decide that supervisory salaries and depreciation on the plant were fired 2. Calculate the average account balances for each of the five accounts. Calculate the average monthly amount of each of the three drivers 3. Calculate the total fixed overhead for the month and the variable rates for indirect labor. utilities, and purchasing. Express the results in the form of an equation for total overhead cost. 4. In January 490 moves, 4.375 machine hours, and 20 purchase orders are expected. What is the total overhead cost expected for the factory in January? 3. What i purchase orders predicted for January were 300? How would that affect the predicted overhead cose? CORNERSTONE 3.3 (continued) Indirect Plant and Labor Supervisory Equipment Cost Utilities Purchasing Salaries Depreciation July 514.250 S12.000 $ 38,200 5 20,000 5 6.500 August 15.800 10.600 35.400 23.000 6,500 September 16.800 12.500 37,600 32.000 6.500 October 20,700 12.500 40.200 27.800 6.500 November 20.000 12.500 39.900 25,400 December 17.000 12.500 39.700 13,000 Total 5104350 572.600 5231.000 $145.200 $39.000 Information on machine hours, number of moves, and number of purchase orders for the six-month period follows Number of Machine Hours Purchase Orders Mones (Mr) (PO) July 340 5,400 250 August 380 5.200 300 September 3.800 450 October 300 6.200 380 November 480 6.000 340 December 420 5,600 200 Total 2.520 34,200 1.920 right Why: By separating accounts with primarily fixed costs from those with primarily vari- able costs, and associating the variable costs with relevant drivers, it is possible to determine cost beluvior and use it in budgeting performance evaluation, and de cision making Required: 1. Why did the controller decide that supervisory salaries and depreciation on the plant were fired 2. Calculate the average account balances for each of the five accounts. Calculate the average monthly amount of each of the three drivers 3. Calculate the total fixed overhead for the month and the variable rates for indirect labor. utilities, and purchasing. Express the results in the form of an equation for total overhead cost. 4. In January 490 moves, 4.375 machine hours, and 20 purchase orders are expected. What is the total overhead cost expected for the factory in January? 3. What i purchase orders predicted for January were 300? How would that affect the predicted overhead cose