The Culver Company is preparing its Manufacturing Overhead Budget for the third 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.
-If the budgeted production for August is 5,000 units,what is the total budgeted factory overhead per unit?

Question

Quizplus · Accepted Answer

The total budgeted factory overhead per unit is calculated by adding the variable and fixed overhead costs per unit. The variable cost is $3.00 per unit. The fixed cost per month is $75,000. For 5,000 units, the fixed cost per unit is $75,000 / 5,000 = $15.00. Adding the variable cost of $3.00 to the fixed cost of $15.00 gives a total of $18.00 per unit.

The Culver Company Is Preparing Its Manufacturing Overhead Budget for the Third