Sullivan Company
Sullivan Company is preparing its Manufacturing Overhead budget for the second quarter of the year.Budgeted variable factory overhead is $3.00 per unit produced;budgeted fixed factory overhead is $75,000 per month,with $16,000 of this amount being factory depreciation.
Refer to Sullivan Company.If the budgeted production for May is 5,000 units,then the total budgeted factory overhead per unit:

Question

Quizplus · Accepted Answer

The total budgeted factory overhead per unit for May is calculated by adding the variable and fixed overhead costs per unit. The variable overhead is $3.00 per unit. The fixed overhead per month is $75,000, which does not change with the number of units produced. To find the fixed overhead per unit, divide the total fixed overhead by the number of units produced: $75,000 / 5,000 units = $15 per unit. Adding the variable overhead per unit ($3) to the fixed overhead per unit ($15) gives a total of $18 per unit.

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