Question

Glaston company manufactures a single product using jit inventory system. The production budget indicates that the number of units expected to be produced are 198,000 in October, 206,500 in November, and 203,000 in December. Glaston assigns variable overhead at a rate of 0.70 per unit of production. Fixed overhead equals155,000 per month. Compute the budgeted total factory overhead for October?

Answer 1

The budgeted total factory overhead for October is $293,600.

Step-by-step explanation:

To compute the budgeted total factory overhead for October, we need to calculate the variable overhead and add it to the fixed overhead. The variable overhead rate is $0.70 per unit of production. The number of units expected to be produced in October is 198,000. Therefore, the variable overhead for October is 198,000 units * $0.70 per unit = $138,600. Adding the fixed overhead of $155,000, the budgeted total factory overhead for October is $138,600 + $155,000 = $293,600.