Fill in the Blank QuestionFill in the blank question.A manufacturing company has budgeted direct labor hours of 600 at a variable overhead rate per direct labor hour of $20. The budgeted fixed cost is $500 per month. The total budgeted overhead cost for the month will be $_.
Question
Fill in the Blank QuestionFill in the blank question.A manufacturing company has budgeted direct labor hours of 600 at a variable overhead rate per direct labor hour of 500 per month. The total budgeted overhead cost for the month will be $_.
Solution
To calculate the total budgeted overhead cost for the month, you need to add the variable overhead to the fixed overhead.
Step 1: Calculate the variable overhead The variable overhead is the direct labor hours multiplied by the variable overhead rate per direct labor hour. In this case, it's 600 hours * 12,000.
Step 2: Add the fixed overhead The fixed overhead is given as $500.
Step 3: Add the variable overhead and the fixed overhead to get the total budgeted overhead cost for the month. So, 500 (fixed overhead) = $12,500.
Therefore, the total budgeted overhead cost for the month will be $12,500.
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