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 $223,000 Gas 50,000 Indirect labor 179,000 Supervision 73,000 Depreciation on equipment 51,000 Depreciation on the buliding 40,000 Rental of special equipment 10,000 Electricity (for lighting, heating, and air conditioning) 28,400 Telephone 4,000 Landscaping service 1,700 Other overhead 52,000 In the coming year, Johnston expects to powder coat 170,000 units. Each unit takes 1.2 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 b1a12aff2024f98_1 Variable overhead rate $fill in the blank b1a12aff2024f98_2 per direct labor hour Total fixed overhead $fill in the blank b1a12aff2024f98_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 c63903072f85fc2_1 Variable overhead rate $fill in the blank c63903072f85fc2_2 Budgeted variable overhead $fill in the blank c63903072f85fc2_3 Budgeted fixed overhead fill in the blank c63903072f85fc2_4 Total budgeted overhead $fill in the blank c63903072f85fc2_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 bd4145f90fd5062_1 per direct labor hour Total overhead rate $fill in the blank bd4145f90fd5062_2 per direct labor hour Question Content Area 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 overhead amounts do not change. Calculate the new budgeted direct labor hours. fill in the blank 9c2dccf7304106a_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 f2381609cff5fe5_1 Variable overhead rate $fill in the blank f2381609cff5fe5_2 Budgeted variable overhead $fill in the blank f2381609cff5fe5_3 Budgeted fixed overhead fill in the blank f2381609cff5fe5_4 Total budgeted overhead $fill in the blank f2381609cff5fe5_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 c4c81203405a027_1 per direct labor hour Total overhead rate $fill in the blank c4c81203405a027_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 overhead categories in the coming year.
| Supplies | $223,000 |
| Gas | 50,000 |
| Indirect labor | 179,000 |
| Supervision | 73,000 |
| 51,000 | |
| Depreciation on the buliding | 40,000 |
| Rental of special equipment | 10,000 |
| Electricity (for lighting, heating, and air conditioning) | 28,400 |
| Telephone | 4,000 |
| Landscaping service | 1,700 |
| Other overhead | 52,000 |
In the coming year, Johnston expects to powder coat 170,000 units. Each unit takes 1.2 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 b1a12aff2024f98_1 | |
| Variable overhead rate | $fill in the blank b1a12aff2024f98_2 | per direct labor hour |
| Total fixed overhead | $fill in the blank b1a12aff2024f98_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 c63903072f85fc2_1 |
| Variable overhead rate | $fill in the blank c63903072f85fc2_2 |
| Budgeted variable overhead | $fill in the blank c63903072f85fc2_3 |
| Budgeted fixed overhead | fill in the blank c63903072f85fc2_4 |
| Total budgeted overhead | $fill in the blank c63903072f85fc2_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 bd4145f90fd5062_1 per direct labor hour |
| Total overhead rate | $fill in the blank bd4145f90fd5062_2 per direct labor hour |
Question Content Area
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 overhead amounts do not change. Calculate the new budgeted direct labor hours.
fill in the blank 9c2dccf7304106a_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 f2381609cff5fe5_1 |
| Variable overhead rate | $fill in the blank f2381609cff5fe5_2 |
| Budgeted variable overhead | $fill in the blank f2381609cff5fe5_3 |
| Budgeted fixed overhead | fill in the blank f2381609cff5fe5_4 |
| Total budgeted overhead | $fill in the blank f2381609cff5fe5_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 c4c81203405a027_1 per direct labor hour |
| Total overhead rate | $fill in the blank c4c81203405a027_2 per direct labor hour |
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