Question

The master budget of Swifty Corporation shows that the planned activity level for next year is expected to be 50000 machine hours. At this level of activity, the following manufacturing overhead costs are expected: Indirect labor $780000 Machine supplies 250000 Indirect materials 180000 Depreciation on factory building 190000 Total manufacturing overhead $1400000 A flexible budget for a level of activity of 60000 machine hours would show total manufacturing overhead costs of

Answer 1

Total Manufacturing Overheads = $1198,333

Step-by-step explanation:

Machine Supplies would vary with the new level of machine hours. therefore flex the overheads to obtain the budgeted manufacturing overheads.

Note ; Depreciation remains constant as this is not affected by new level of machine hours

Total manufacturing overhead costs at a level of 60000 machine hours

Indirect labor (780,000 /50,000×60,000) 650,000

Machine supplies ($250000/50,000×60,000) 208,333

Indirect materials (180,000/50,000×60,000) 150,000

Depreciation on factory building 190,000

Total Manufacturing Overheads 1198,333