Exercise 11-5

The Stanton Supply Co. produces cleaning equipment for professional cleaners. At the start of the year, Stanton estimated variable overhead costs to be $13 per unit and total fixed overhead costs at $293,000, based on a volume of 67,000 units. The detail for the overhead estimates follows:

Variable overhead Indirect material ($8) 536,000 Utilities ($2) 134,000 Maintenance ($3) 201,000 Total variable overhead 871,000 Fixed overhead Supervisor salaries 1 16,000 Depreciation 52,000 Other fixed overhead 25,000 Total fixed overhead 293,000 Total overhead costs $1,164,000 Actual costs for the year are as follows: Actual Production 57,600 units Variable overhead 456,000 Indirect material 95,300 Utilities 157,000 Maintenance Total variable overhead 708,300 Fixed overhead 1 Supervisor salaries 29,000 Depreciation 42,000 Other fixed overhead 30,000 Total fixed overhead 301,000 Total overhead costs $1,009,300