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Question 3 A. Jenny Limited has produced an overhead budget for next year based on two levels of activity, 8,000 units and 11,000 units. It
Question 3 A. Jenny Limited has produced an overhead budget for next year based on two levels of activity, 8,000 units and 11,000 units. It needs to calculate budgeted figures based on an activity level of 10,000 units. The budgeted figures for activity levels of 8,000 and 11,000 are shown below: Jenny Limited. Budgeted Overheads for the year ending 31 December 2020 Production (Units) 8,000 11,000 Type of Cost $ Factory Rent Fixed 40,000 40,000 Factory Depreciation Fixed 50,000 50,000 Indirect labour Variable 24,000 33,000 Indirect materials Variable 20,800 28,600 Electricity Semi-variable 64,800 78,600 Stock insurance Semi-variable 44,400 57,000 Total 244,000 287,200 Required: Calculate the budgeted cost for each of the six types of overheads at an activity level of 10,000 units giving consideration to the fact that some overheads are fixed costs, some are variable and some are semi-variable. [10 marks]
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