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Cerium Inc. produces a variety of household cleaning products. Cerium's controller has developed standard costs for the following four overhead items: Variable Rate per Direct Labor Hour Overhead Item Maintenance Power Indirect labor 140,000 Rent 35,000 Next year, Cerium expects production to require 58,000 direct labor hours. Required: 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. Cerium Inc. Overhead Budget For the Coming Year Line Item Description Rate per Hour Variable costs: Maintenance Power Indirect labor Total variable cost Fixed costs: Total Fixed Cost $113,000 Maintenance Indirect labor Rent Total fixed costs Total overhead costs E $0.20 0.68 3.70 Activity Level 58,000 Hours

Cerium Inc. produces a variety of household cleaning products. Cerium's controller has developed standard costs for the following four overhead items: Variable Rate per Direct Labor Hour Overhead Item Maintenance Power Indirect labor 140,000 Rent 35,000 Next year, Cerium expects production to require 58,000 direct labor hours. Required: 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. Cerium Inc. Overhead Budget For the Coming Year Line Item Description Rate per Hour Variable costs: Maintenance Power Indirect labor Total variable cost Fixed costs: Total Fixed Cost $113,000 Maintenance Indirect labor Rent Total fixed costs Total overhead costs E $0.20 0.68 3.70 Activity Level 58,000 Hours

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 63E: Use the following information for Exercises 9-63 and 9-64: Palladium Inc. produces a variety of...
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Flexible Budget for Various Levels of Activity Cerium Inc. produces a variety of household cleaning products. Cerium's controller has developed standard costs for the following four overhead items: Variable Rate per Direct Labor Hour Overhead Item Maintenance Variable costs: Maintenance Power Indirect labor 140,000 Rent 35,000 Next year, Cerium expects production to require 58,000 direct labor hours. Required: 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. Cerium Inc. Overhead Budget For the Coming Year Line Item Description Rate per Hour Power Indirect labor Total variable cost Fixed costs: Maintenance Indirect labor Total Fixed Cost $ 113,000 Rent Total fixed costs Total overhead costs Activity Level 58,000 Hours $0.20 0.68 3.70 0000 00000
Transcribed Image Text:Flexible Budget for Various Levels of Activity Cerium Inc. produces a variety of household cleaning products. Cerium's controller has developed standard costs for the following four overhead items: Variable Rate per Direct Labor Hour Overhead Item Maintenance Variable costs: Maintenance Power Indirect labor 140,000 Rent 35,000 Next year, Cerium expects production to require 58,000 direct labor hours. Required: 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. Cerium Inc. Overhead Budget For the Coming Year Line Item Description Rate per Hour Power Indirect labor Total variable cost Fixed costs: Maintenance Indirect labor Total Fixed Cost $ 113,000 Rent Total fixed costs Total overhead costs Activity Level 58,000 Hours $0.20 0.68 3.70 0000 00000
2. Prepare an overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected. Activity Level Activity Level Variable costs: Maintenance Power Indirect labor Total variable costs Fixed costs: Maintenance Indirect labor Rent Total fixed costs Total overhead costs Rate per Hour Hours Hours $
Transcribed Image Text:2. Prepare an overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected. Activity Level Activity Level Variable costs: Maintenance Power Indirect labor Total variable costs Fixed costs: Maintenance Indirect labor Rent Total fixed costs Total overhead costs Rate per Hour Hours Hours $
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