Hatzenbuhler Manufacturing Corporation has prepared the following overhead budget for next month. The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 6,600 machine-hours rather than 6,800 machine-hours?

Question

Hatzenbuhler Manufacturing Corporation has prepared the following overhead budget for next month.  The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 6,600 machine-hours rather than 6,800 machine-hours?

Quizplus · Accepted Answer

Variable cost per MH for supplies = $22,440 ÷ 6,800 MHs = $3.30 per MH
Variable cost per MH for indirect labor = $55,760 ÷ 6,800 MHs = $8.20 per MH
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Hatzenbuhler Manufacturing Corporation Has Prepared the Following Overhead Budget for Next