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 Gas Indirect labor Supervision $221,000 50,000 176,000 76,000 Depreciation on equipment 55,000 Depreciation on the buliding Rental of special equipment 40,000 10,000 Electricity (for lighting, heating, and air conditioning) 27,900 Telephone 4,100 Landscaping service 1,400 Other overhead 51,000 In the coming year, Johnston expects to powder coat 180,000 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. 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 234,000 Variable overhead rate 1.16 Total fixed overhead 441,400 Feedback per direct labor hour Check My Work The overhead budget shows the expected cost of all indirect manufacturing items. It is based on variable and fixed overhead used in production. Decide which costs are fixed and which are variable and calculate. 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 Variable overhead rate 234,000 X 1.16 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 234,000 X Variable overhead rate 1.16 Budgeted variable overhead 271,000 X Budgeted fixed overhead 440,400 X Total budgeted overhead 712,400 X 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 Total overhead rate 1.89 per direct labor hour 3.05 X per direct labor hour Feedback 3. What if Johnston had expected to make 178,000 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. 231,400 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 Variable overhead rate Budgeted variable overhead Budgeted fixed overhead Total budgeted overhead 231,400 1.16 267,989 X 441,400 709,389 X Feedback