Question

Glaston Company manufactures a single product using a JIT inventory system. The production budget indicates that the number of units expected to be produced are 200,000 in October, 208,500 in November, and 205,000 in December. Glaston assigns variable overhead at a rate of $0.80 per unit of production. Fixed overhead equals $157,000 per month. Compute the total budgeted overhead that would appear on the factory overhead budget for month of October.

Answer 1

Answer:

$ 317,000

Explanation:

Octuber Production:  200,000    

Variable Overhead:      $      0.80 per unit    

Fixed Overhead:        $ 157,000    

     

Factory Overhead Budget for October:      

   

Octuber Production x Variable Overhead =    200,000 x 0.80 =  160,000      

           

Variable Overhead:  $ 160,000

+  

Fixed Overhead:         $ 157,000  

     

Total Overhead:         $ 317,000    ( $ 160,000 + $ 157,000 )