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eBook Overhead Budget Johnston Company cleans and applies powder coat paint to metal items on a job-order basis. Johnston has budgeted the following amounts for various overhead categories in the coming year. Supplies $216,000 Gas 50,000 Indirect labor 176,000 Supervision 73,500 Depreciation on equipment 47,000 Depreciation on the buliding 40,000 Rental of special equipment 11,000 Electricity (for lighting, heating, and air conditioning) 28,900 Telephone 4,300 Landscaping service 1,200 Other overhead 50,000 In the coming year, Johnston expects to powder coat 120,000 units. Each unit takes 1.3 direct labor hours. Johnston has found that supplies and gas (used to run the drying ovens-all units pass through the drying ovens after powder coat paint is applied) tend to vary with the number of units produced. All other overhead categories are considered to be fixed. Required: 1. Calculate the number of direct labor hours Johnston must budget for the coming year. Calculate the variable overhead rate. Calculate the total fixed overhead for the coming year. When required, round your answers to the nearest cent and use the rounded answers in subsequent requirements. Direct labor hours 156,000 Variable overhead rate 216,000 X per direct labor hour Total fixed overhead 431,900 eBook 2. Prepare an overhead budget for Johnston for the coming year. Show the total variable overhead, total fixed overhead, and total overhead. When required, round your answers to the nearest cent. Johnston Company Overhead Budget For the Coming Year Budgeted direct labor hours 156,000 Variable overhead rate 266,000 X Budgeted variable overhead $ 266,000 X Budgeted fixed overhead 431,900 X Total budgeted overhead $ 697,900 Feedback Check My Work See Cornerstone 8.5. Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent. Fixed overhead rate 2,769 X per direct labor hour Total overhead rate 4,474 X per direct labor hour Feedback Check My Work See Cornerstone 8.5. eBook 3. What if Johnston had expected to make 118,000 units next year? Assume that the variable overhead per unit does not change and the total fixed overhead amounts do not change. Calculate the new budgeted direct labor hours. 153,400 Feedback Check My Work Consider the new labor rate and calculate new amounts. Only the direct labor hours change. Prepare a new budget. Prepare a new overhead budget. If required, round your answers to the nearest cent. Johnston Company New Overhead Budget For the Coming Year Budgeted direct labor hours 261,547 X Variable overhead rate 1,705 X Budgeted variable overhead $ 261,550 X 431,900 Budgeted fixed overhead Total budgeted overhead 693,450 x Feedback Check My Work Consider the new labor rate and calculate new amounts. Only the direct labor hours change. Prepare a new budget. eBook Jonnston Company New Overhead Budget For the Coming Year Budgeted direct labor hours 261,547 x Variable overhead rate 1,705 Budgeted variable overhead 261,550 X Budgeted fixed overhead 431,900 Total budgeted overhead 693,450 X Feedback Check My Work Consider the new labor rate and calculate new amounts. Only the direct labor hours change. Prepare a new budget. Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent. Fixed overhead rate 281 X per direct labor hour Total overhead rate $ 4,521 x per direct labor hour Feedback Feedback Check My Work Partially correct