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6 December, 21:47

The master budget of Swifty Corporation shows that the planned activity level for next year is expected to be 50000 machine hours. At this level of activity, the following manufacturing overhead costs are expected: Indirect labor $780000 Machine supplies 250000 Indirect materials 180000 Depreciation on factory building 190000 Total manufacturing overhead $1400000 A flexible budget for a level of activity of 60000 machine hours would show total manufacturing overhead costs of

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  1. 6 December, 22:01
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    Total Manufacturing Overheads = $1198,333

    Explanation:

    Machine Supplies would vary with the new level of machine hours. therefore flex the overheads to obtain the budgeted manufacturing overheads.

    Note; Depreciation remains constant as this is not affected by new level of machine hours

    Total manufacturing overhead costs at a level of 60000 machine hours

    Indirect labor (780,000 / 50,000*60,000) 650,000

    Machine supplies ($250000/50,000*60,000) 208,333

    Indirect materials (180,000/50,000*60,000) 150,000

    Depreciation on factory building 190,000

    Total Manufacturing Overheads 1198,333
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