Homework SourseThe master budget of Crane Company shows that the planned ac
The master budget of Crane Company shows that the planned activity level for next year is expected to be 50000 machine hours. At this level of activity, the following manufacturing overhead costs are expected:
$1290000
A flexible budget for a level of activity of 60000 machine hours would show total manufacturing overhead costs of _____?
| Indirect labor | $680000 |
| Machine supplies | 150000 |
| Indirect materials | 280000 |
| Depreciation on factory building | 180000 |
| Total manufacturing overhead | $1290000 |
Solution
Total manufacturing overhead costs = {[($680,000 + $150,000 + $280,000) / 50,000] × 60,000} + $180,000 = $1,512,000
