Saved Help Save & ExitSubmit 4 Check my work James Corp. applies overhead on the

Question

Saved Help Save & ExitSubmit 4 Check my work James Corp. applies overhead on the basis of direct labor hours. For the month of May, the company planned production of 8,000 units (80% of its production capacity of 10,000 units) and prepared the following overhead budget Operating Levels 808 Overhead Budget Production in units Standard direct labor hours Budgeted overhead ints 8,000 20,000 eBook Hint Print References Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable costs $16,000 20,000 5,000 44,000 Pixed overhead costs Rent of factory building Depreciation-HachinerY Supervisory salaries Total fixed costs 16,000 10,100 14,900 41,000 85,000 Total overhead costs During May, the company operated at 90% capacity (9,000 units) and incurred the following actual overhead costs: Overhead Coata Indirect naterials Indireot labor Pover Maintenance Rent of factory building Depreciation-Hachinery Supervisory salaries $16,000 22,200 5,625 3,975 6,000 10,100 Total actual overhead costs $91,500

Explanation / Answer

1)

Total actual overhead. 91500

Flexible budget overhead

Variable (44000*9/8). 49500

Fixed 41000

90500

Overhead controllable variance. 1000

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