For Roche Inc variable manufacturing overhead costs are expe

For Roche Inc., variable manufacturing overhead costs are expected to be $20,980 in the first quarter of 2014, with $4,440 increments in each of the remaining three quarters. Fixed overhead costs are estimated to be $35,770 in each quarter. Prepare the manufacturing overhead budget by quarters and in total for the year.

Solution

Q-1

Q-2

Q-3

Q-4

YEAR

Variable cost

20980

25420

29860

34300

110560

Fixed cost

35770

35770

35770

35770

143080

Total cost

56750

61190

65630

70070

253640

Total cost = variiable cost + Fixed cost

Variable cost increment per quarter is $4440.

Q1 variable cost = 20980

Q2 variable cost = Q1 + 4440 = 25420      

Q3 variable cost = Q2+4440 = 29860

Q4 variable cost = Q3+4440 = 34300

Total Q1 cost = Variable cost + Fixed cost

And

Total cost for Year = Q1 + Q2 + Q3 + Q4 = 56750+61190+65630+70070 = 253640