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16 April, 16:16

Feline Watch Company makes wrist watches out of silver metal sheets. Five hours of labor are needed to make each watch. Factory workers are paid $7 each hour. Variable overhead costs are $4 per labor hour. Fixed overhead costs total $5,000 each month. If Feline wanted to manufacture 500 watches in the month of September, what should it budget in overhead costs

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  1. 16 April, 19:38
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    Feline Watch Company should budget $15,000 overhead costs.

    Explanation:

    5 labor hours per unit of watch at $7 per labor hour

    Variable Overheads $4 per labor hour

    Total Variable overheads for 500 watches

    $4 per labor hour * 5 labor hours per watch * 500 watches = $10,000

    Fixed Overhead = $5,000

    Total Overhead = $15,000
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