Barringer Manufacturing Corporation has prepared the following overhead budget f

Question

Barringer Manufacturing Corporation has prepared the following overhead budget for next month.

Activity level... 7,800 machine-hours

Variable overhead costs:
Supplies... $34,320
Indirect labor... 50,700
Fixed overhead costs:
Supervision... 10,200
Utilities... 5,600
Depreciation... 8,800
Total overhead cost... $109,620

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 7,900 machine-hours rather than 7,800 machine-hours?

Explanation / Answer

$109,620 +(34,320+50700)(7900-7800)/7800 =109620+1090 =110710

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