Kerekes 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 2,400 machine-hours rather than 2,500 machine-hours?

Question

Kerekes 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 2,400 machine-hours rather than 2,500 machine-hours?

Quizplus · Accepted Answer

Variable cost per MH for supplies = $12,250 ÷ 2,500 MHs = $4.90 per MH
Variable cost per MH for indirect labor = $22,000 ÷ 2,500 MHs = $8.80 per MH 11ea7998_5c9f_aebd_911b_1bc53e4c1164_TB2627_00_TB2627_00

Kerekes Manufacturing Corporation Has Prepared the Following Overhead Budget for Next