Ceiling Fans by Ike's overhead budget for 2009 was as follows: 600,000 units were produced in 2009.
Direct labor cost is $18,000,000.
For both 2009 and 2010, each unit required 3 direct labor hours at $10 per hour.
In 2010, property taxes, insurance, and depreciation are expected to stay at 2009 levels.
Utilities costs vary proportionally with units produced.
Factory supervision increases by increments of $30,000 for every 200,000 increase in direct labor hours.
The 2010 expected production is 1,200,000 units.
If the expected 2010 expense for factory supervision and for utilities costs is $500,000 and $250,000, respectively, then the total for the 2010 overhead budget is
A) $900,000.
B) $800,000.
C) $650,000.
D) $750,000.
Correct Answer:
Verified
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