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Montgomery Company has developed the following flexible budget formulas for its four overhead items: Overhead item Fixed Cost Variable rate per direct labor hour Maintenance
Montgomery Company has developed the following flexible budget formulas for its four overhead items:
Overhead item | Fixed Cost | Variable rate per direct labor hour |
Maintenance | $10,105 | $13 |
Power | $1,112 | $0.21 |
Indirect labor cost | $12.00 | |
Equipment lease | $ 7,000 |
Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours).
What is the total budgeted overhead for an expected activity level of 10,000 units.
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