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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 $224,000 Gas 56,000 Indirect labor 174,000 Supervision 78,000 Depreciation on equipment 49,000 Depreciation on the buliding 46,000 12,000 27,800 4,300 1,900 57,000 Rental of special equipment Electricity (for lighting, heating, and air conditioning) Telephone Landscaping service Other overhead In the coming year, Johnston expects to powder coat 170,000 units. Each unit takes 1.3 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: 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. Variable overhead rate Total fixed overhead per direct labor hour. 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 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 $224,000 Gas 56,000 Indirect labor 174,000 Supervision 78,000 Depreciation on equipment 49,000 Depreciation on the buliding 46,000 12,000 27,800 4,300 1,900 57,000 Rental of special equipment Electricity (for lighting, heating, and air conditioning) Telephone Landscaping service Other overhead In the coming year, Johnston expects to powder coat 170,000 units. Each unit takes 1.3 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: 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. Variable overhead rate Total fixed overhead per direct labor hour. 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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Overhead Budget 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 $224,000 56,000 174,000 78,000 49,000 46,000 12,000 27,800 4,300 1,900 57,000 Gas Indirect labor Supervision Depreciation on equipment Depreciation on the buliding Rental of special equipment Electricity (for lighting, heating, and air conditioning) Telephone Landscaping service Other overhead In the coming year, Johnston expects to powder coat 170,000 units. Each unit takes 1.3 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: 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 Variable overhead rate Total fixed overhead $ $ per direct labor hour 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.
Transcribed Image Text:Overhead Budget 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 $224,000 56,000 174,000 78,000 49,000 46,000 12,000 27,800 4,300 1,900 57,000 Gas Indirect labor Supervision Depreciation on equipment Depreciation on the buliding Rental of special equipment Electricity (for lighting, heating, and air conditioning) Telephone Landscaping service Other overhead In the coming year, Johnston expects to powder coat 170,000 units. Each unit takes 1.3 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: 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 Variable overhead rate Total fixed overhead $ $ per direct labor hour 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.
P 2. Prepare an overhead budget for Johnsson of the earning year, show the total variable overhoss, toza Exod overhead, and total everhead. When required, round your answers to the nearest cant. Johnston Company Overheed Budget For the Coming Year Bucgeted direct labor hours Verleble overheed rece Budgeted variable overheed Budgeted fixed averheed Total bucigeted overhead Calculate the fixed averhead rate and the total overhead rate. if required, round your answers to the nearest cent. Fixed overhead rate per direct labor hour Total overhead rate per direct labor hour 3. What if Johnston hed expected to make 168,000 units next year? Assume that the veriable overheed per unit does not change and the total fixed overhead amounts do not change. Calculate the new budgeted direct labor hours. Prepare a new overhead budget. If required, round your answers to the nearest cent. Johnston Company New Overhead Budget For the Coming Year Budgeted direct labor hours Variable overhead rate Bucgeted variable overhead 3. What if Johnston had expected to make 168,000 units next year? Assume that the variable overhead per unit does not change and the total fixed overheed amounts do not change. Calculate the new bucgeted. direct labor hours. Prepare a new overhead budget. If required, round your answers to the nearest cent Johnston Company New Overhead Budget For the Coming Year Budgeted direct lebor hours Variable everhead rate Budgeted variable overhead Budgeted fixed overhead Total budgeted overheed $ Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent Fixed overhead rate per direct labor hour Total overhead rate per direct labor hour
Transcribed Image Text:P 2. Prepare an overhead budget for Johnsson of the earning year, show the total variable overhoss, toza Exod overhead, and total everhead. When required, round your answers to the nearest cant. Johnston Company Overheed Budget For the Coming Year Bucgeted direct labor hours Verleble overheed rece Budgeted variable overheed Budgeted fixed averheed Total bucigeted overhead Calculate the fixed averhead rate and the total overhead rate. if required, round your answers to the nearest cent. Fixed overhead rate per direct labor hour Total overhead rate per direct labor hour 3. What if Johnston hed expected to make 168,000 units next year? Assume that the veriable overheed per unit does not change and the total fixed overhead amounts do not change. Calculate the new budgeted direct labor hours. Prepare a new overhead budget. If required, round your answers to the nearest cent. Johnston Company New Overhead Budget For the Coming Year Budgeted direct labor hours Variable overhead rate Bucgeted variable overhead 3. What if Johnston had expected to make 168,000 units next year? Assume that the variable overhead per unit does not change and the total fixed overheed amounts do not change. Calculate the new bucgeted. direct labor hours. Prepare a new overhead budget. If required, round your answers to the nearest cent Johnston Company New Overhead Budget For the Coming Year Budgeted direct lebor hours Variable everhead rate Budgeted variable overhead Budgeted fixed overhead Total budgeted overheed $ Calculate the fixed overhead rate and the total overhead rate. If required, round your answers to the nearest cent Fixed overhead rate per direct labor hour Total overhead rate per direct labor hour
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