Advertising expenses $232,000 Production supervisor wages $135,000
Manufacturing supplies 14,000 Production control wages 32,000
Power and light 48,000 Executive officer salaries 310,000
Sales commissions 298,000 Materials management wages 39,000
Factory insurance 30,000 Factory depreciation 22,000
Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only fixed factory costs.
Answer:
SWEET TOOTH CANDY COMPANY
Factory Overhead Cost Budget
For the Month Ending August 31, 2014
Variable factory overhead costs:
Manufacturing supplies $ 14,000
Power and light 48,000
Production supervisor wages 135,000
Production control wages 32,000
Materials management wages 39,000
Total variable factory overhead costs $268,000
Fixed factory overhead costs:
Factory insurance $ 30,000
Factory depreciation 22,000
Total fixed factory overhead costs 52,000
Total factory overhead costs $320,000
Note: Advertising expenses, sales commissions, and executive officer salaries are
selling and administrative expenses.
