Question

Factory Overhead Cost Budget Budget that estimates the cost for each item of factory overhead needed to support budgeted production. Sweet Tooth Candy Company budgeted the following costs for anticipated production for August:

Advertising expenses $232,000
Manufacturing supplies 14,000
Power and light 48,000
Sales commissions 298,000
Factory insurance 30,000
Production supervisor wages 135,000
Production control wages 32,000
Executive officer salaries 310,000
Materials management wages 39,000
Factory depreciation 22,000
Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only fixed factory costs.
Variable Factory Overhead Cost - list out separately
Total variable factory overhead costs
Fixed factory overhead costs:
Total fixed factory overhead costs
Total factory overhead costs

Answer 1

Factory Overhead Cost Budget

For the month ending August 31, 2016

Variable factory overhead costs:

Manufacturing supplies $14,000

Power and light $48,000

Production supervisor wages $135,000

Production control wages $32,000

Materials management wages $39,000

Total variable factory overhead costs $268,000

Fixed Factory Overhead Costs

Factory insurance $30,000

Factory depreciation $22,000

Total Fixed Factory Overhead Costs $52,000

Total factory overhead costs $320,000

Thus, the total factory overhead cost for the month of August, 2016 is $320,000.