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	$220,000
Gas	52,000
Indirect labor	177,000
Supervision	75,500
Depreciation on equipment	50,000
Depreciation on the buliding	44,000
Rental of special equipment	12,500
Electricity (for lighting, heating, and air conditioning)	27,600
Telephone	4,400
Landscaping service	1,000
Other overhead	60,000

In the coming year, Johnston expects to powder coat 170,000 units. Each unit takes 1.2 direct labor hours. Johnston has found that supplies and gas (used to run the drying ovensall 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:

Question Content Area

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
Variable overhead rate		per direct labor hour
Total fixed overhead

Feedback Area

Feedback

Partially correct

Question Content Area

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

	Enter # Here
Budgeted direct labor hours
Variable overhead rate
Budgeted variable overhead
Budgeted fixed overhead
Total budgeted overhead

Feedback Area

Feedback

Prepare an overhead budget using the amounts calculated in Requirement 1.

Question Content Area

Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent.

Fixed overhead rate	____ per direct labor hour
Total overhead rate	____per direct labor hour

Feedback Area

Feedback

Prepare an overhead budget using the amounts calculated in Requirement 1.

Question Content Area

3. What if Johnston had expected to make 168,000 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. fill in the blank 5a6f3dfe001afc2_1

Feedback Area

Feedback

Calculate the new number of budgeted direct labor hours given the change in units. Use this information to prepare a new overhead budget. Also, use the new number of direct labor hours to calculate a revised fixed overhead rate and total overhead rate.

Question Content Area

Prepare a new overhead budget. If required, round your answers to the nearest cent.

Johnston Company New Overhead Budget For the Coming Year

	Enter # Here
Budgeted direct labor hours
Variable overhead rate
Budgeted variable overhead
Budgeted fixed overhead
Total budgeted overhead

Feedback Area

Feedback

Calculate the new number of budgeted direct labor hours given the change in units. Use this information to prepare a new overhead budget. Also, use the new number of direct labor hours to calculate a revised fixed overhead rate and total overhead rate.

Question Content Area

Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent.

	Enter # Here
Fixed overhead rate
Total overhead rate

Feedback Area

Feedback

Calculate the new number of budgeted direct labor hours given the change in units. Use this information to prepare a new overhead budget. Also, use the new number of direct labor hours to calculate a revised fixed overhead rate and total overhead rate.

Feedback Area

Feedback

Partially correct

Check My Work