See information in Textbook fo
See information in Textbook for Exercise 9-63. I need to changeone number. Change the expected production number of direct laborhours to be 88,000 instead of the quantity given for that in theexercise
9-63
Palladium INC. produces a variety of household cleaningproducts. Palladium’s controller has developed standard costs forthe following four overhead items:
Overhead Item total fixedmaterials variable rate per direct labor hour
Maintenance 86,000 .20
Power .45
Indirectlabor 140,000 2.10
Rent 35,000
Refer to the information for Palladium Inc. above.
1. Prepare an overhead budget for the expected level of directlabor hours for the coming year.
2. Prepare an overhead budget that reflects production that is15% higher than expected and for production that is 15% lower thanexpected.
Answer:
| 1.) | Direct Labor hours | 88,000 | |
| Amount $ | |||
| Maintenance | 103,600 | =86000+(88000*0.2) | |
| Power | 39,600 | =88000*0.45 | |
| Indirect Labor | 324,800 | =140000+(88000*2.1) | |
| Rent | 35,000 | ||
| OverheadBudget | 503,000 | ||
| 2.) | Direct Laborhours | 101,200 | =88000*115% |
| (15% higher thanexpected) | |||
| Amount $ | |||
| Maintenance | 106,240 | =86000+(101200*0.2) | |
| Power | 45,540 | =101200*0.45 | |
| Indirect Labor | 352,520 | =140000+(101200*2.1) | |
| Rent | 35,000 | ||
| OverheadBudget | 539,300 | ||
| Direct Laborhours | 74,800 | =88000*85% | |
| (15% lower thanexpected) | |||
| Amount $ | |||
| Maintenance | 100,960 | =86000+(74800*0.2) | |
| Power | 33,660 | =74800*0.45 | |
| Indirect Labor | 297,080 | =140000+(74800*2.1) | |
| Rent | 35,000 | ||
| OverheadBudget | 466,700 | ||
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