140,000 35,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not give solution in image format thanku

Transcribed Image Text: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
Rent
140,000
35,000
Next year, Cenum expects production to require 58,000 direct labor hours.
Required:
Total Fixed Cost
$113,000
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
Maintenance
Indirect labor
$0.20
0.68
3.70
Activity Level
58,000 Hours
00 0.000
Protnie
Newt

Transcribed Image Text:-
Fixed costs:
Maintenance
Indirect labor
Rent
Total fixed costs
Total overhead costs
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 i
Rate per Hour
Hours
Hours
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