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	60,000
Indirect labor	173,000
Supervision	77,500
Depreciation on equipment	49,000
Depreciation on the buliding	43,000
Rental of special equipment	13,500
Electricity (for lighting, heating, and air conditioning)	27,400
Telephone	5,000
Landscaping service	2,000
Other overhead	54,000

In the coming year, Johnston expects to powder coat 180,000 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:

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.

216,000 Direct labor hours Variable overhead rate 1.30 per direct labor hour Total fixed overhead 444,400 Feedback 2. Prepare an overhead budget for Johnston for the coming year. Show the total variable overhead, tota 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 216,000 Variable overhead rate 1.30 Budgeted variable overhead 280,800 Budgeted fixed overhead 444,400 Total budgeted overhead 725,200 Feedback Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent. Fixed overhead rate X per direct labor hour Total overhead rate per direct labor hour 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. Feedback 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 Feedback Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent. per direct labor hour Fixed overhead rate Total overhead rate per direct labor hour