Question

A company’s planned activity level for next year is expected to be 100000 machine hours. At this level of activity, the company budgeted the following manufacturing overhead costs: Variable Fixed Indirect materials $140000 Depreciation $50000 Indirect labor 170000 Taxes 10000 Factory supplies 22000 Supervision 40000 A flexible budget prepared at the 90000 machine hours level of activity would show total manufacturing overhead costs of

Answer 1

$398,800

Step-by-step explanation:

The computation of total manufacturing overhead costs is shown below:-

Indirect material = $140,000 ÷ 100,000 × 90,000

= $126,000

Indirect labor = $170,000 ÷ 100,000 × 90,000

= $153,000

Factory supplies = $22,000 ÷ 100,000 × 90,000

= $19,800

Total manufacturing cost = Indirect material + Indirect labor + Factory supplies + Depreciation + Taxes + Supervision

= $126,000 + $153,000 + $19,800 + $50,000 + $10,000 + $40,000

= $398,800