Johnston Company cleans and applies powder coat paint to metal items on a job-order basis. Johnston has budgeted the following amounts for various overhead categories in the coming year. Supplies $220,000 Gas 56,000 Indirect labor 172,000 Supervision 75,500 Depreciation on equipment 51,000 Depreciation on the buliding 45,000 Rental of special equipment 11,500 Electricity (for lighting, heating, and air conditioning) 28,300 Telephone 5,000 Landscaping service 1,800 Other overhead 50,000 In the coming year, Johnston expects to powder coat 140,000 units. Each unit takes 1.4 direct labor hours. Johnston has found that supplies and gas (used to run the drying ovens—all units pass through the drying ovens after powder coat paint is applied) tend to vary with the number of units produced. All other overhead categories are considered to be fixed. Required: Question Content Area 1. Calculate the number of direct labor hours Johnston must budget for the coming year. Calculate the variable overhead rate. Calculate the total fixed overhead for the coming year. When required, round your answers to the nearest cent and use the rounded answers in subsequent requirements. Direct labor hours fill in the blank 042655fc0062049_1 Variable overhead rate $fill in the blank 042655fc0062049_2 per direct labor hour Total fixed overhead $fill in the blank 042655fc0062049_3 Question Content Area 2. Prepare an overhead budget for Johnston for the coming year. Show the total variable overhead, total fixed overhead, and total overhead. When required, round your answers to the nearest cent. Johnston CompanyOverhead BudgetFor the Coming Year Budgeted direct labor hours fill in the blank 337691fd6f8ffb9_1 Variable overhead rate $fill in the blank 337691fd6f8ffb9_2 Budgeted variable overhead $fill in the blank 337691fd6f8ffb9_3 Budgeted fixed overhead fill in the blank 337691fd6f8ffb9_4 Total budgeted overhead $fill in the blank 337691fd6f8ffb9_5 Question Content Area Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent. Fixed overhead rate $fill in the blank f731d3045029fed_1 per direct labor hour Total overhead rate $fill in the blank f731d3045029fed_2 per direct labor hour Question Content Area 3. What if Johnston had expected to make 138,000 units next year? Assume that the variable overhead per unit does not change and the total fixed overhead amounts do not change. Calculate the new budgeted direct labor hours. fill in the blank 25aa8902afab044_1 Question Content Area Prepare a new overhead budget. If required, round your answers to the nearest cent. Johnston CompanyNew Overhead BudgetFor the Coming Year Budgeted direct labor hours fill in the blank ecdfd8f57077020_1 Variable overhead rate $fill in the blank ecdfd8f57077020_2 Budgeted variable overhead $fill in the blank ecdfd8f57077020_3 Budgeted fixed overhead fill in the blank ecdfd8f57077020_4 Total budgeted overhead $fill in the blank ecdfd8f57077020_5 Question Content Area Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent. Fixed overhead rate $fill in the blank 2d884bf82035000_1 per direct labor hour Total overhead rate $fill in the blank 2d884bf82035000_2 per direct labor hour
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Johnston Company cleans and applies powder coat paint to metal items on a job-order basis. Johnston has budgeted the following amounts for various
| Supplies | $220,000 |
| Gas | 56,000 |
| Indirect labor | 172,000 |
| Supervision | 75,500 |
| 51,000 | |
| Depreciation on the buliding | 45,000 |
| Rental of special equipment | 11,500 |
| Electricity (for lighting, heating, and air conditioning) | 28,300 |
| Telephone | 5,000 |
| Landscaping service | 1,800 |
| Other overhead | 50,000 |
In the coming year, Johnston expects to powder coat 140,000 units. Each unit takes 1.4 direct labor hours. Johnston has found that supplies and gas (used to run the drying ovens—all units pass through the drying ovens after powder coat paint is applied) tend to vary with the number of units produced. All other overhead categories are considered to be fixed.
Required:
Question Content Area
1. Calculate the number of direct labor hours Johnston must budget for the coming year. Calculate the variable overhead rate. Calculate the total fixed overhead for the coming year. When required, round your answers to the nearest cent and use the rounded answers in subsequent requirements.
| Direct labor hours | fill in the blank 042655fc0062049_1 | |
| Variable overhead rate | $fill in the blank 042655fc0062049_2 | per direct labor hour |
| Total fixed overhead | $fill in the blank 042655fc0062049_3 |
Question Content Area
2. Prepare an overhead budget for Johnston for the coming year. Show the total variable overhead, total fixed overhead, and total overhead. When required, round your answers to the nearest cent.
| Budgeted direct labor hours | fill in the blank 337691fd6f8ffb9_1 |
| Variable overhead rate | $fill in the blank 337691fd6f8ffb9_2 |
| Budgeted variable overhead | $fill in the blank 337691fd6f8ffb9_3 |
| Budgeted fixed overhead | fill in the blank 337691fd6f8ffb9_4 |
| Total budgeted overhead | $fill in the blank 337691fd6f8ffb9_5 |
Question Content Area
Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent.
| Fixed overhead rate | $fill in the blank f731d3045029fed_1 per direct labor hour |
| Total overhead rate | $fill in the blank f731d3045029fed_2 per direct labor hour |
Question Content Area
3. What if Johnston had expected to make 138,000 units next year? Assume that the variable overhead per unit does not change and the total fixed overhead amounts do not change. Calculate the new budgeted direct labor hours.
fill in the blank 25aa8902afab044_1
Question Content Area
Prepare a new overhead budget. If required, round your answers to the nearest cent.
| Budgeted direct labor hours | fill in the blank ecdfd8f57077020_1 |
| Variable overhead rate | $fill in the blank ecdfd8f57077020_2 |
| Budgeted variable overhead | $fill in the blank ecdfd8f57077020_3 |
| Budgeted fixed overhead | fill in the blank ecdfd8f57077020_4 |
| Total budgeted overhead | $fill in the blank ecdfd8f57077020_5 |
Question Content Area
Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent.
| Fixed overhead rate | $fill in the blank 2d884bf82035000_1 per direct labor hour |
| Total overhead rate | $fill in the blank 2d884bf82035000_2 per direct labor hour |
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