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27 October, 23:41

Movers Company manufactures sneakers. Production of its new sneakers for the coming three months is budgeted as follows: August 28,000 September 50,000 October 33,000 Each sneaker requires 2.5 hours of direct labor time. Direct labor wages average $16 per hour. Monthly variable overhead averages $10 per direct labor hour plus fixed overhead of $4,500. What is the total overhead budgeted for the month of September

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  1. 28 October, 00:23
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    Budgeted overhead cost = $1,250,000

    Explanation:

    Budgeted overhead for the month of September = Total labour hours * overhead rate per hour

    Total labor hours = standard hours * budgeted production units

    =2.5 hours * 40,000 = 125,000

    Budgeted overhead cost Total = $10 * 125,000 = $1250000

    Budgeted overhead cost = $1,250,000
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