Question

The estimated overhead costs of Aquamarine Company for the month of March are 27,800. The estimated overhead includes 9,450 of ordering costs. The ariable rate per order is 15. Determine the total overhead cost if the number of orders has increased by 700 orders.

Answer 1

The new total overhead cost for Aquamarine Company with an additional 700 orders, considering the variable rate of $15 per order, would be $38,300.

Step-by-step explanation:

The question asks us to calculate the new total overhead cost for Aquamarine Company considering an increase in the number of orders. The initial estimated overhead costs are $27,800, including $9,450 of ordering costs. With a variable rate per order of $15, we can calculate the increased overhead costs due to the additional 700 orders.

The increased ordering costs can be calculated by multiplying the number of additional orders (700) by the variable rate ($15), which equates to an increase of $10,500 in ordering costs. Therefore, the new total overhead cost is the sum of the initial estimated overhead costs and the increased ordering costs: $27,800 + $10,500 = $38,300.