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 various
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 | 58,000 |
Indirect labor | 172,000 |
Supervision | 76,000 |
Depreciation on equipment | 46,000 |
Depreciation on the buliding | 47,000 |
Rental of special equipment | 14,500 |
Electricity (for lighting, heating, and air conditioning) | 27,200 |
Telephone | 4,100 |
Landscaping service | 1,200 |
Other overhead | 58,000 |
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:
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 | fill in the blank bf6e46004fe9fed_1 | |
Variable overhead rate | $fill in the blank bf6e46004fe9fed_2 | per direct labor hour |
Total fixed overhead | $fill in the blank bf6e46004fe9fed_3 |
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 | fill in the blank 237d6c07207dfcf_1 |
Variable overhead rate | $fill in the blank 237d6c07207dfcf_2 |
Budgeted variable overhead | $fill in the blank 237d6c07207dfcf_3 |
Budgeted fixed overhead | fill in the blank 237d6c07207dfcf_4 |
Total budgeted overhead | $fill in the blank 237d6c07207dfcf_5 |
Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent.
Fixed overhead rate | $fill in the blank d91129fef060f90_1 per direct labor hour |
Total overhead rate | $fill in the blank d91129fef060f90_2 per direct labor hour |
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 7e0594fd5fe5f90_1
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 | fill in the blank 82210302cf9b02c_1 |
Variable overhead rate | $fill in the blank 82210302cf9b02c_2 |
Budgeted variable overhead | $fill in the blank 82210302cf9b02c_3 |
Budgeted fixed overhead | fill in the blank 82210302cf9b02c_4 |
Total budgeted overhead | $fill in the blank 82210302cf9b02c_5 |
Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent.
Fixed overhead rate | $fill in the blank a17f80f81fdcfa6_1 per direct labor hour |
Total overhead rate | $fill in the blank a17f80f81fdcfa6_2 per direct labor hour |
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