Wells Enterprises manufactures a component that is processed successively by Department I and Department II. Manufacturing overhead is applied to units produced at the following budget costs:

Manufacturing Overhead per Unit

Fixed

Variable

Total

Department I

$

20

$

5

$

25

Department II

16

3

19

These budgeted overhead costs per unit are based on the normal volume of production of 6,000 units per month. In January, variable manufacturing overhead in Department II is expected to be 20 percent above budget because of major scheduled repairs to equipment. The company plans to produce 10,000 units during January.

Prepare a budget for manufacturing overhead costs in January using three column headings: Total, Department I, and Department II.

	total	Dept 1	Dept 2
Fixed manufacturing overhead:
Dept 1 &2
Variable manufacturing overhead:
Dept 1 &2
totals