Jenner, Inc. and Kardash, Inc. are two companies in the same industry. Both companies estimate total fixed and variable overhead costs based on direct labor hours.

Required

a. Assumer that Jenner, Inc. estimated its total overhead at $400,000, the variable overhead per direct labor hour at $8, and the activity level at 30,000 direct labor hours. Determine fixed overhead.

b. Assume that Kardash, Inc. uses a predetermined overhead rate of $15, based on 40,000 direct labor hours. The predetermined variable overhead rate is $12 per direct labor hour. Determine the budgeted variable overhead and the budgeted fixed overhead.

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