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Makovka662 [10]
2 years ago
15

Kerekes Manufacturing Corporation has prepared the following overhead budget for next month. Activity level 2,200 machine-hours

Variable overhead costs: Supplies $ 9,240 Indirect labor 17,820 Fixed overhead costs: Supervision 15,300 Utilities 5,600 Depreciation 6,600 Total overhead cost $ 54,560 The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 2,100 machine-hours rather than 2,200 machine-hours
Business
1 answer:
den301095 [7]2 years ago
5 0

Answer:

Total budget =  $53,330

Explanation:

<em>The total overhead is an example d of a mixed cost. A mixed cost is that made up of a variable portion and a fixed portion. The variable portion is driven by the activity level- machine hours. While the fixed portion is independent of the machine hours</em>

Fixed overhead = 15,300 + 5,600+ 6600 = 27500

Variable overhead per hour = (54,560 -27500)/2200

                                             = $12.3 per hour

Budget for 2,100 machine hours

= 27,500 + ($12.3× 2100)

= $53,330

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