Question
In an attempt to improve budgeting, the controller for Meliore, Inc., has developed a flexible budget for overhead costs. Meliore, Inc., makes two types of
In an attempt to improve budgeting, the controller for Meliore, Inc., has developed a flexible budget for overhead costs. Meliore, Inc., makes two types of products, the standard model and the deluxe model. Meliore expects to produce 300,000 units of the standard model and 120,000 units of the deluxe model during the coming year. The standard model requires 0.10 direct labor hour per unit, and the deluxe model requires 0.16. The controller has developed the following cost formulas for each of the four overhead items:
| Cost Formula | |
| Maintenance | $34,600 + $1.25 DLH |
| Power | $0.50 DLH |
| Indirect labor | $68,200 + $2.30 DLH |
| Rent | $31,100 |
Required:
Question Content Area
1. Prepare an overhead budget for the expected activity level for the coming year.
| Per DLH | |||
|---|---|---|---|
| Budgeted direct labor hours | fill in the blank DLH | ||
| Variable costs: | |||
| Maintenance | $fill in the blank | $fill in the blank | |
| Power | fill in the blank | fill in the blank | |
| Indirect labor | fill in the blank | fill in the blank | |
| Total variable costs | $fill in the blank | ||
| Fixed costs: | |||
| Maintenance | $fill in the blank | ||
| Indirect labor | fill in the blank | ||
| Rent | fill in the blank | ||
| Total fixed costs | fill in the blank | ||
| Total overhead costs | $fill in the blank |
Question Content Area
2. Prepare an overhead budget that reflects production that is 10 percent higher than expected (for both products).
| Per DLH | |||
|---|---|---|---|
| Budgeted direct labor hours | fill in the blank DLH | ||
| Variable costs: | |||
| Maintenance | $fill in the blank | $fill in the blank | |
| Power | fill in the blank | fill in the blank | |
| Indirect labor | fill in the blank | fill in the blank | |
| Total variable costs | $fill in the blank | ||
| Fixed costs: | |||
| Maintenance | $fill in the blank | ||
| Indirect labor | fill in the blank | ||
| Rent | fill in the blank | ||
| Total fixed costs | fill in the blank | ||
| Total overhead costs | $fill in the blank |
Question Content Area
Prepare an overhead budget for production that is 20 percent lower than expected.
| Per DLH | |||
|---|---|---|---|
| Budgeted direct labor hours | fill in the blank DLH | ||
| Variable costs: | |||
| Maintenance | $fill in the blank | $fill in the blank | |
| Power | fill in the blank | fill in the blank | |
| Indirect labor | fill in the blank | fill in the blank | |
| Total variable costs | $fill in the blank | ||
| Fixed costs: | |||
| Maintenance | $fill in the blank | ||
| Indirect labor | fill in the blank | ||
| Rent | fill in the blank | ||
| Total fixed costs | fill in the blank | ||
| Total overhead costs | $fill in the blank |
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Be Audit You Can Be
Authors: Awesome Auditor
1st Edition
1659095700, 978-1659095708
