Kerekes Manufacturing Corporation has prepared the followingoverhead budget for next month. Activity level 3,100...

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Kerekes Manufacturing Corporation has prepared the followingoverhead budget for next month. Activity level 3,100 machine-hoursVariable overhead costs: Supplies $ 15,810 Indirect labor 27,900Fixed overhead costs: Supervision 17,000 Utilities 6,500Depreciation 7,500 Total overhead cost $ 74,710 The company'svariable overhead costs are driven by machine-hours. What would bethe total budgeted overhead cost for next month if the activitylevel is 3,000 machine-hours rather than 3,100 machine-hours?Multiple Choice $72,650 $72,300 $73,300 $74,710

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4.1 Ratings (633 Votes)

The correct answer is $73,300 which is calculated as below:-

Variable overhead cost per 3,100 machine hours

Supplies	15,810	3,100	5.10	Per machine hours
Indirect labor	27,900	3,100	9.00	Per machine hours

Hence, variable overhead cost for 3,000 machine hours

Supplies	5.10	3,000	15,300
Indirect labor	9.00	3,000	27,000

Total variable overhead cost			42,300

Add : Fixed cost
Supervision		17,000
utilities		6,500
Depreciation		7,500	31,000

Total budgeted overhead cost			73,300

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In: AccountingKerekes Manufacturing Corporation has prepared the followingoverhead budget for next month. Activity level 3,100 machine-hours...Kerekes Manufacturing Corporation has prepared the followingoverhead budget for next month. Activity level 3,100 machine-hoursVariable overhead costs: Supplies $ 15,810 Indirect labor 27,900Fixed overhead costs: Supervision 17,000 Utilities 6,500Depreciation 7,500 Total overhead cost $ 74,710 The company'svariable overhead costs are driven by machine-hours. What would bethe total budgeted overhead cost for next month if the activitylevel is 3,000 machine-hours rather than 3,100 machine-hours?Multiple Choice $72,650 $72,300 $73,300 $74,710