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 196,000 in October, 204,500 in November, and 201,000 in December. Glaston assigns variable overhead at a rate of $0.75 per unit of production. Fixed overhead equals $153,000 per month. Compute the total budgeted overhead that would appear on the factory overhead budget for month of October.

Answer 1

The correct answer is $300,000.

Step-by-step explanation:

According to the scenario, the computation of the given data are as follows:

We can calculate the total budgeted overhead by using following formula:

Factory Budgeted Overhead = Budgeted variable overhead + Fixed Overhead

Where, Budgeted Variable Overhead = $0.75 X 196,000 = $147,000

By putting the value, we get

Factory Budgeted Overhead = $147,000 + $153,000

= $300,000

Hence, the total budgeted overhead that would appear on the factory overhead budget for month of October is $300,000.