Question

PA5.

LO 7.2Spree Party Lights overhead expenses are:



Prepare a manufacturing overhead budget if the number of units to produce for January, February, and March are 2,500, 3,000, and 2,700, respectively.

Answer 1

January February March

production 2,500 3,000 2,700

variable 44,875 53,850 48,465

fixed 14,500 14,500 14,500

total 59,375 68,350 62,965

Step-by-step explanation:

indirect materials 0.5 (2 dollar per pound x .25 pound per unit)

indirect labor 16.5 ( 1 hour x 16.50 rate)

maintenance 0.75

utilities 0.2

total variable 17.95

supervisor 1000

maintenance 9000

insurance 3000

depreciation 1500

total fixed 14500

the fixed amount will remain the same and we will solve for the variable on each month considering each units generates 17.95 dollar of variable overhead