Question
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
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 $216,000 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
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