# Flexible overhead budget Wiki Wiki Company has determined that the variable overhead rate is $4.50 per direct labor hour in the Fabrication Department. The normal production capacity for the Fabrication Department is 10,000 hours for the month. Fixed costs are budgeted at$60,000 for the month. a. Prepare a monthly factory overhead flexible budget for 9,000, 10,000, and 11,000 hours of production. b. How much overhead would be applied to production if 9,000 hours were used in the department during the month?

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

#### Solutions

Chapter
Section
Chapter 23, Problem 23.16EX
Textbook Problem

## Flexible overhead budget Wiki Wiki Company has determined that the variable overhead rate is $4.50 per direct labor hour in the Fabrication Department. The normal production capacity for the Fabrication Department is 10,000 hours for the month. Fixed costs are budgeted at$60,000 for the month. a.    Prepare a monthly factory overhead flexible budget for 9,000, 10,000, and 11,000 hours of production. b.    How much overhead would be applied to production if 9,000 hours were used in the department during the month?

Expert Solution

(a)

To determine

A flexible overhead budget is referred as a thorough plan for controlling the overhead cost, and is valid for the firm’s relevant range of activity. Based on the standard input the flexible overhead budget is measured. (Example: Machine hours)

To prepare: A monthly factory overhead flexible budget of Company W.

### Explanation of Solution

 Company W Monthly factory overhead cost budget- Fabrication Department Direct labor hours (a) 9,000 10,000 11,000 Direct labor rate per hours (b) $4.5$ 4.5 $4.5$  Variable...
Expert Solution

(b)

To determine
The amount of overhead applied to production if 9,000 hours were used in the department.

### Want to see the full answer?

Check out a sample textbook solution.See solution

### Want to see this answer and more?

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

See solution

Find more solutions based on key concepts
Show solutions
Describe Enterprise Risk Management (ERM).

Accounting Information Systems

What is the difference between a committee and a task force?

Foundations of Business (MindTap Course List)

How should the capital structure weights used to calculate the WACC be determined?

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)