CHAPTER 9 Profit Planning and Flexible Budgets
E 9-51
change here, please ↓
↓
S12L7 S12L5
Beginning inventory 340 170
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year % from next quarter’s sales 20% 30%
Sales………………….…………………………………….………………
800 2,200 5,600 4,600 13,200 First quarter, 2012 800 1,300
Desired ending Second quarter, 2012 2,200 1,400
inventory………………….…………………………………….………………
440 1,120 920 180 180 Third quarter, 2012 5,600 5,300
Total needs………………….…………………………………….………………
1,240 3,320 6,520 4,780 13,380 Fourth quarter, 2012 4,600 3,900
Less: Beginning First quarter, 2013 900 1,200
inventory………………….…………………………………….………………
340 440 1,120 920 340
Units produced………………….…………………………………….………………
900 2,880 5,400 3,860 13,040
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year
Sales………………….…………………………………….………………
inventory………………….…………………………………….………………
Total needs………………….…………………………………….………………
inventory………………….…………………………………….………………
Units produced………………….…………………………………….………………
Stillwater Designs
Production Budget for S12L5
For the Year Ended December 31, 20X1
Stillwater Designs
Production Budget for S12L7
For the Year Ended December 31, 20X1
CHAPTER 9 Profit Planning and Flexible Budgets
E 9-52
1.
change here, please ↓
beg. inventory 9,300
January February March Total % required 25%
Sales……………………………………………………………………………………………………………………………………………………
36,000 38,000 41,000 115,000 end. inventory
Desired ending inventory…………………………………………………………………………………………………………………………………
Total needs……………………………………………………………………………………………………………………………………………………
Less: Beginning inventory……………………………………………………………………………………………………………………………
Units produced………………………………………………………………………………………………………………………………………………
2. jar sets required 1
peanuts required (oz) 24
Jar Sets: January February Total production requirement 10%
36,200 38,750 74,950
1 1 1
36,200 38,750 74,950
3,875 4,150 4,150
40,075 42,900 79,100
3,620 3,875 3,620
36,455 39,025 75,480
Peanuts:
Direct Materials Purchases Budget
For January and February
Peanut Land Inc.
Production Budget
For the First Quarter of the Year
Peanut Land Inc.
CHAPTER 9 Profit Planning and Flexible Budgets
E 9-53
change here, please ↓
beg. inventory 21,000
April May June Total required 25%
Sales……………………………………………………………………………………………………………………………………………………
180,000 220,000 200,000 600,000 sales:
Desired ending inventory…………………………………………………………………………………………………………………………………
Total needs……………………………………………………………………………………………………………………………………………………
Less: Beginning inventory……………………………………………………………………………………………………………………………
E 9-54
change here, please ↓
cost per ounce 0.08
July August September Total ounces required 15
Units to be produced……………………………………………………………………………………………………
3,500 4,400 4,900 12,800 required 20%
× Direct materials per unit
(ounces)……………………………………………………………………………………………………
15 15 15 15 units:
Production needs……………………………………………………………………………………………………
52,500 66,000 73,500 192,000 July 3,500
(ounces)……………………………………………………………………………………………………
Total needs……………………………………………………………………………………………………
Less: Beginning inventory……………………………………………………………………………………………………
purchased (ounces)……………………………………………………………………………………………………
Aqua-Pro Inc.
Production Budget
For the Second Quarter
Langer Company
Direct Materials Purchases Budget
For July, August, and September
CHAPTER 9 Profit Planning and Flexible Budgets
E 9-55
change here, please ↓
March April May Total Cost per Labor hour 20
Units to be produced……………………………………………………………………………………………………
4,000 13,000 14,400 31,400 No of Labor hours 0.40
× Direct labor time per Production budget:
unit (hours)……………………………………………………………………………………………………
Total hours needed……………………………………………………………………………………………………
E 9-56
change here, please ↓
Units Price Total Sales ↓ inputs ↓ units price
LB-1…………………………………………………………………………………………………………………………………………………..
36,750 ###### # $1,176,000 14,700 × 250% = 36,750 32.00
LB-2………………………………………………………………………………………………………………………………………………….
18,900 20.00 378,000 18,000 × 105% = 18,900 20.00
WE-6…………………………………………………………………………………………………………………………………………………
25,200 10.50 264,600 25,200 × 30% = 7,560 15.00 – 15.00 × 30% = 10.50
WE-7…………………………………………………………………………………………………………………………………………………
WE-8*………………………………………………………………………………………………………………………………………………..
WE-9*………………………………………………………………………………………………………………………………………………..
Evans Company
Direct Labor Budget
For March, April, and May
Model
Alger Inc.
Sales Budget
For the Coming Year
CHAPTER 9 Profit Planning and Flexible Budgets
E 9-57
1.
change here, please ↓
September October November December required 5%
Sales………………………………………………………………………………………………………………………………………………………..
250 200 230 380 September 250
Desired ending inventory…………………………………………………………………………………………………….
Needed……………………………………………………………………………………………………………………
Less: Beginning inventory……………………………………………………………………………………………………
fruit 1
2. small gifts 6
fruit required 5%
small gifts required 30%
Fruit September October November
Production……………………………………………………………………………………………………………………..
247 202 237
× Pounds of fruit ………………………………………………………………………………………………………………
1 1 1
required for production…………………………………………………………………………………………………………..
247 202 237
Desired inventory………………………………………………………………………………………………………………
10 12 18
Total needs…………………………………………………………………………………………………………………….
257 214 255
Less: Beginning inventory……………………………………………………………………………………………………
12 10 12
Pounds purchased……………………………………………………………………………………………………………
245 204 243
Production……………………………………………………………………………………………………………………..
× Items required………………………………………………………………………………………………..……………..
Needed for production……………………………………………………………………………………………………………..
Desired inventory……………………………………………………………………………………………………………..
Total needs…………………………………………………………………………………………………………………….
Less: Beginning inventory……………………………………………………………………………………………………
Items purchased……………………………………………………………………………………………………………….
3. December includes the holiday season and is a time when many gifts are given. Jani
has factored this into her budgeting. January, on the other hand, is a month with few
national holidays or gift-giving occasions. As a result, Jani has forecast fewer gift
baskets.
Jani’s Flowers and Gifts
Production Budget for Gift Baskets
For September, October, November, and December
For September, October, and November
Jani’s Flowers and Gifts
Direct Materials Purchases Budget
CHAPTER 9 Profit Planning and Flexible Budgets
change here, please ↓
E 9-58
April 250,000
1. Credit Sales in May = $290,000 × 0.85 = $246,500 290,000 × 85% = 246,500 May 290,000
Credit Sales in June = $280,000 × 0.85 = $238,000 280,000 × 85% = 238,000 June 280,000
Credit Sales in July = $295,000 × 0.85 = $250,750 295,000 × 85% = 250,750 July 295,000
Credit Sales in August = $300,000 × 0.85 = $255,000 300,000 × 85% = 255,000 August 300,000
2. Credit sales 85% month of sale 25%
Cash sales 15% month after sale 68%
2nd month after sale 5%
July August ↓ links ↓
Cash sales………………………………………………………………………………………………………………………………………………….
$ 44,250 $ 45,000 cash sales July 295,000 × 15% = 44,250
Collections on account: cash sales Aug. 300,000 × 15% = 45,000
From May credit sales:
↓ links ↓
(0.05 × $246,500)…………………………………………………………………………………………………………………….………….
From June credit sales:
(0.68 × $238,000)…………………………………………………………………………………………………………………….………….
(0.05 × $238,000)…………………………………………………………………………………………………………………….………….
From July credit sales:
(0.25 × $250,750)…………………………………………………………………………………………………………………….………….
(0.68 × $250,750)…………………………………………………………………………………………………………………….………….
From August credit sales:
(0.25 × $255,000)…………………………………………………………………………………………………………………….………….
0 63,750 25% × 255,000 = 63,750
Cash receipts………………………………………..………………………………………………………………………………
$281,103 $291,160
E 9-59
change here, please ↓
1. discount rate 2% 2nd month after sale 23% April 190,000
cash sales 5% month after sale 55% May 248,000
month of sale 20% June 260,000
Collections on account: July 240,000
From May credit sales: ↓ links ↓ August 300,000
(0.23 × $248,000)…………………………………………………………………………………………………………………….………….
$ 57,040 23% × 248,000 = 57,040
From June credit sales:
(0.55 × $260,000)…………………………………………………………………………………………………………………….………….
143,000 55% × 260,000 = 143,000
(0.20 × $240,000)…………………………………………………………………………………………………………………….………….
(0.02 × $48,000)…………………………………………………………………………………………………………………….………….
Schedule of Cash Receipts
For July
Bennett Inc.
Schedule of Cash Receipts
For July and August
Roybal Inc.
CHAPTER 9 Profit Planning and Flexible Budgets
E 9-59 (Concluded) (all links to previous page)
2. discount rate 2% 2nd mo. after sale 23% April 190,000
cash sales 5% mo. after sale 55% May 248,000
month of sale 20% June 260,000
Collections on account: July 240,000
From June credit sales:
↓ links ↓ ↓ links ↓ August 300,000
(0.23 × $260,000)…………………………………………………………………………………………………………………….………….
$ 59,800 23% × 260,000 = 59,800
From July credit sales:
(0.55 × $240,000)…………………………………………………………………………………………………………………….………….
From August credit sales:
(0.20 × $300,000)…………………………………………………………………………………………………………………….………….
Less: August cash discount
(0.02 × $60,000)…………………………………………………………………………………………………………………….………….
E 9-60
change here, please ↓
% Paid 20% Labor cost 32,300 June 68,000
Current month 80% August 35,400 July 77,000
Current month 90% August 73,000
Payments on accounts payable: ↓ links ↓ Following month 10% Overhead 71,200
From July purchases (0.80 × $77,000)…………………………………..……………………………………………………..………………………………….
$ 61,600 80% × 77,000 = 61,600 Depreciation 6,350
From August purchases (0.20 × $73,000)…………………………………..……………………………………………………..………………………………….
14,600 20% × 73,000 = 14,600 Loan 15,000
From July (0.10 × $32,300)…………………………………..……………………………………………………..………………………………….
From August (0.90 × $35,400)…………………………………..……………………………………………………..……………………………….…
Schedule of Cash Receipts
For August
Roybal Inc.
Fein Company
Schedule of Cash Payments
For August
E 9-61 change here, please ↓
beg. balance 736 current month 40% june cash sales 18,600
Salaries 11,750 next month 30% june credit sales 54,000
Beginning cash balance……………………………..…………………………………………………………………………………………………
$ 736 Paid to owner 4,500 third month 24% april cash sales 10,000
Collections: Rent 4,100 Late fee 2% april credit sales 28,900
Cash sales………………………………………………………………………………………………………………………………………….
18,600 Taxes 6,780 may credit sales 35,000
Credit sales: may cash sales 18,000
Current month ($54,000 × 0.40)………………………………………………………………………………………………………………………………………….………
21,600 54,000 × 40% = 21,600 % of sales purchases 64%
May credit sales ($35,000 × 0.30)………………………………………………………………………………………………………………………………………….………
10,500 35,000 × 30% = 10,500 current month 20%
April credit sales*…………………………………………………………………………………………………………….…………………………
5,896 next month 80%
Total cash available………………………………………………………………………………………………………………………………
$57,332
Current month ($72,600 × 0.64 × 0.20)……………………………………………………………………………………………………………………………………………………….……..
Prior month ($53,000 × 0.64 × 0.80)……………………………………………………………………………………………………………………………………………………….……..
Total cash needs…………………………………………………………………………………………………..……………………………….
*$28,900 × 0.20 = $5,780 28,900 × 20% = 5,780
$5,780 × 0.02 = $116 5,780 × 2% = 116
$5,780 + $116 = $5,896 5,780 + 116 = 5,896
2. Yes, the business does show a negative cash balance for the month of June. A
negative budgeted cash balance is unacceptable. The easiest way to deal with it
would be for the owner to consider taking less cash salary.
Cash Budget
For June
CHAPTER 9 Profit Planning and Flexible Budgets
E 9-62
change here, please ↓
1. Leather strips required 2Units 4,500
Cost Formula 3,500 units 4,000 units 4,500 units Material rate 7.00 4,000
Direct materials……………………………………………………………………………………………………………………………………..
$14.00 $49,000 $56,000 $63,000 Labor 1.50 3,500
Direct labor……………………………………………………………………………………………………………………………………..
Variable overhead……………………………………………………………………………………………………………………………………..
Fixed overhead……………………………………………………………………………………………………………………………………..
↓ links ↓
2. Unit cost at 3,500 units = $156,600/3,500 = $44.74 156,600 /3,500 = 44.74
Flexible Budget for
CHAPTER 9 Profit Planning and Flexible Budgets
E 9-63
1.
Activity Level
Formula 90,000 Hours change here, please ↓
Variable costs: $0.20 $ 18,000 FC Variable/DLH
Maintenance…………………………………………………………………………………………………………………………………..
0.45 40,500 Maintenance 86,000 0.20
Power…………………………………………………………………………………………………………………………………..
2.10 189,000 Power 0.45
Indirect labor…………………………………………………………………………………………………………………………………..
$247,500 Indirect labor 140,000 2.10
Total variable costs…………………………………………………………………………………………………………………………………..
Rent 35,000
Fixed costs: DLH 90,000
Maintenance…………………………………………………………………………………………………………………………………..
$ 86,000 Percent 15%
Indirect labor…………………………………………………………………………………………………………………………………..
140,000
Rent…………………………………………………………………………………………………………………………………..
35,000
Total fixed costs…………………………………………………………………………………………………………………………………..
2. Direct Labor Hours for 15% Higher Production = 90,000 + 0.15(90,000) 90,000 + 15% × 90,000 = 103,500
= 103,500
Direct Labor Hours for 15% Lower Production = 90,000 – 0.15(90,000) 90,000 – 15% × 90,000 = 76,500
= 76,500
103,500 76,500
Formula Hours Hours
Variable costs:
Maintenance…………………………………………………………………………………………………………………………………..
$0.20 $ 20,700 $ 15,300 ← links
Power…………………………………………………………………………………………………………………………………..
0.45 46,575 34,425
Indirect labor…………………………………………………………………………………………………………………………………..
2.10 217,350 160,650
Total variable costs…………………………………………………………………………………………………………………………………..
$284,625 $210,375
Fixed costs:
Maintenance…………………………………………………………………………………………………………………………………..
$ 86,000 $ 86,000
Indirect labor…………………………………………………………………………………………………………………………………..
140,000 140,000
Rent…………………………………………………………………………………………………………………………………..
35,000 35,000
Total fixed costs…………………………………………………………………………………………………………………………………..
$261,000 $261,000
↓ links ↓
Activity Level
Palladium Inc.
Overhead Budget
For the Coming Year
CHAPTER 9 Profit Planning and Flexible Budgets
E 9-64
Actual Budgeted Variance change here, please ↓
Direct labor hours Maintenance 107,000
based on actual………………………………………………………………………………………………………………………………..
93,000 93,000 —Power 41,200
Variable overhead: Indirect labor 336,000
Performance Report
CHAPTER 9 Profit Planning and Flexible Budgets
P 9-65 change here, please
Cash Services 25% current month 10% 100%
Credit services 75% next month 60% late charge 3%
third month 26% % uncollected 4%
August September 194,000 × 25% = 48,500 May 180,000
Cash fees……………………………………………..………….…………………………………
$ 48,500 $ 60,000 240,000 × 25% = 60,000 June 200,000
Received from sales in: ↓ links ↓ July 190,000
June
(0.75 × 0.26 × $200,000 × 1.03)………………………………………………………………………………………….………………………………………….…
40,170 —75% × 26% × 200,000 × 103% = 40,170 August 194,000
July
(0.75 × 0.60 × $190,000)………………………………………………………………………………………….……………………………………….……
85,500 —75% × 60% × 190,000 = 85,500 September 240,000
(0.75 × 0.26 × $190,000 × 1.03)………………………………………………………………………………………….………………………………………….…
(0.75 × 0.10 × $194,000)………………………………………………………………………………………….……………………………………….……
(0.75 × 0.60 × $194,000)………………………………………………………………………………………….……………………………………….……
(0.75 × 0.10 × $240,000)………………………………………………………………………………………….……………………………………….……
Total……………………………………………………………………………..…………………………………
P 9-66 change here, please ↓
1. January 40,000
February 50,000
a. Schedule 1:Sales Budget March 60,000
January February March Total April 60,000
Units……………………………………………………
40,000 50,000 60,000 150,000 May 62,000
× Selling price……………………………………………………
$205 $205 $205 $205 @205 unit selling price 205
Sales……………………………………………………
$8,200,000 $10,250,000 $12,300,000 $30,750,000 next month 80%
b. Schedule 2: Production Budget
January February March Total
Sales (Schedule 1)…………………………………………………………………………………………………………
inventory…………………………………………………………………………………………………………
Total needs…………………………………………………………………………………………………………
inventory…………………………………………………………………………………………………………
48,000 58,000 60,000 166,000
↓ links ↓
PROBLEMS
Allison Manufacturing
For the Quarter Ended March 31
Aragon and Associates
Schedule of Cash Receipts
For August and September
CHAPTER 9 Profit Planning and Flexible Budgets
P 9-66 (Continued)
c. Schedule 3: Direct Materials Purchases Budget
Component
Units to
be produced……………………………………………………
48,000 60,000 60,000 166,000 (change here, please)
× Direct
materials……………………………………………………
needs……………………………………………………
inventory……………………………………………………
348,000
288,000
180,000
174,000
580,000
300,000
1,660,000
308,000
Total needs……………………………………………………
770,000 908,000 544,800 1,180,800
Less: 
Beginning
inventory……………………………………………………
be purchased……………………………………………………
290,000
240,000
174,000
318,000
354,000
144,000
590,000
1,728,000
*April Production = 60,000 + (62,000 × 0.80) – 48,000 = 61,600
Desired Ending Inventory of Metal = (61,600 × 10) × 0.50 = 308,000
Desired Ending Inventory of Components = (61,600 × 6) × 0.50 = 184,800
May 62,000
Total
March
Metal
1,968,000
528,000
Component
58,000
Component
January
48,000
Metal
462,000
February
Component
Metal
Metal
58,000
880,000
166,000
CHAPTER 9 Profit Planning and Flexible Budgets
P 9-66 (Continued)
d. Schedule 4: Direct Labor Budget
January February March Total (change here, please)
Units to be labor hour 3
produced labor cost 14.25
(Schedule 2)…………………………………………………………………………………………………………
48,000 58,000 60,000 166,000 overhead rate 2.40
× Direct labor time (links) variable selling exp 3.60
per unit (hours)…………………………………………………………………………………………………………
3 3 3 3 @ 3
Total hours
needed…………………………………………………………………………………………………………
144,000 174,000 180,000 498,000
× Cost per hour $14.25 $14.25 $14.25 $14.25 @ 14.25
Total cost…………………………………………………………………………………………………………
$2,052,000 $2,479,500 $2,565,000 $7,096,500
e. Schedule 5: Overhead Budget
January February March Total
labor (Schedule 4)…………………………………………………………………………………………………………
× Variable
overhead rate…………………………………………………………………………………………………………
variable overhead…………………………………………………………………………………………………………
fixed overhead…………………………………………………………………………………………………………
Total overhead…………………………………………………………………………………………………………
$683,600 $755,600 $770,000 $2,209,200
CHAPTER 9 Profit Planning and Flexible Budgets
P 9-66 (Continued)
f. Schedule 6: Selling and Administrative Expenses Budget
January February March Total
Planned sales
(Schedule 1)…………………………………………………………………………………………………………
40,000 50,000 60,000 150,000
× Variable selling
and admistrative (link) (link)
expenses per unit……………………………………………………
$3.60 $3.60 $3.60 $3.60 @ 3.60 variable selling exp 3.60
CHAPTER 9 Profit Planning and Flexible Budgets
P 9-66 (Continued)
g. Schedule 7: Ending Finished Goods Inventory Budget
Unit cost computation:
Direct materials:
↓ links ↓
Metal (10 lbs. × $8)……………………………………………………………………………………………………………………7
$80 10 × 8 = 80.00 DM metal 10 DM components 6
Components (6 units × $5)…………………………………………………………………………………………………………………
30 $110.00 6 × 5 = 30.00 cost metal 8 cost components 5
Direct labor (3 × $14.25)…………………………………………………………………………………………………………………
Variable (3 × $2.40)……………………………………………………………………………………………………………….
Fixed [3 × ($1,014,000/498,000)]………………………………………………………………………………………………………………
7,970,880
h. Schedule 8: Cost of Goods Sold Budget fixed overhead rate 338,000
Direct materials used (Schedule 3) ↓ links ↓ Depreciation 200,000
Metal (1,660,000 × $8)*………………………………………………………………………………………………………………………………………………………
$13,280,000 1,660,000 × 8 =
Components (996,000 × $5)**………………………………………………………………………………………………………………………………………………………
4,980,000 $18,260,000 996,000 × 5 =
Direct labor used (Schedule 4)………………………………………………………………………………………………………………..………..
7,096,500
Overhead (Schedule 5)………………………………………………………………….…………………….
2,209,200
Budgeted manufacturing costs…………………………………………………………………………………………………………………………….
$27,565,700
Add: Beginning finished goods ↓ links ↓
Cost of goods available for sale……………………………………………………………………………………………………..…………………..
Less: Ending finished goods (Schedule 7)…………………………………………………………………………………………………….…….
1,660,000
13,280,000
4,980,000
CHAPTER 9 Profit Planning and Flexible Budgets
P 9-66 (Concluded)
i. Schedule 9: Budgeted Income Statement
Sales (Schedule 1)………………………………………………………………………………………………………….……………………………
$30,750,000
Less: Cost of goods sold (Schedule 8)…………………………………………………………………………………………………………..…………
24,908,740
Gross margin……………………………………………………………………………………………………………………………….………………
$ 5,841,260
Less: Selling and administrative expenses (Schedule 6)………………………………………………………………………………………………..
870,000
Income before taxes………………………………………………………………………………………………………………………………………
$ 4,971,260
j. Schedule 10: Cash Budget
January February March Total (change here, please)
Beginning balance……………………………………………………
$ 400,000 $ 50,000 $ 495,004 $ 400,000 Interest rate 12%
Cash receipts……………………………………………………
Cash available……………………………………………………
Purchases (Sch. 3)……………………………………………………
Direct labor (Sch. 4)……………………………………………………
Overhead (Sch. 5)……………………………………………………
Selling &
(link)
admin. (Sch. 6)……………………………………………………
214,000 250,000 286,000 750,000 @ Sch 6 – 40,000
Total…………………………………………………………………………………………………………
$8,579,600 $ 9,775,100 $10,109,000 $28,463,700
Tentative
ending balance…………………………………………………………………………………………………………
$ 20,400 $ 524,900 $ 2,686,004 $ 2,686,300
Interest paid…………………………………………………………………………………………………………
Ending balance…………………………………………………………………………………………………………
2. Answers will vary.
CHAPTER 9 Profit Planning and Flexible Budgets
change here, please ↓
P 9-67 ↓ links ↓ bags 80,000
1. Direct Labor Hours = (80,000 bags × 0.20 hour) + (80,000 bags × 0.30 hour) 80,000 × 0.20 = 16,000 Basic diet 0.2
2. Indirect labor 2.1
Maintenance 57,250
Indirect labor 43,500
Rent 39,000
Formula
Variable costs: ↓ links ↓
Maintenance………………………………………………………………………………………………………………………………..
##### # $20,000 40,000 × 0.50 = 20,000
Power………………………………………………………………………………………………………………………………..
0.40 16,000 40,000 × 0.4 = 16,000
Indirect labor………………………………………………………………………………………………………………………………..
2.10 84,000 40,000 × 2.1 = 84,000
Total variable costs………………………………………………………………………………………………………………………………..
Maintenance………………………………………………………………………………………………………………………………..
Indirect labor………………………………………………………………………………………………………………………………..
Rent………………………………………………………………………………………………………………………………..
Total fixed costs………………………………………………………………………………………………………………………………..
40,000 Hours*
Healthy Pet Company
Overhead Budget
For the Coming Year
Activity Level
CHAPTER 9 Profit Planning and Flexible Budgets
P 9-68 ↓ links ↓
change here, please ↓
1. Direct Labor Hours for 10% Higher = 40,000 + (0.10 × 40,000 hours) 40,000 + 10% × 40,000 Percent 10% 20%
44,000 = 44,000 DLH 40,000 <=is from previous page
Direct Labor Hours for 20% Lower = 40,000 – (0.20 × 40,000 hours) 40,000 – 20% × 40,000
32,000 = 32,000
2. 10% higher:
Formula ← links
Variable costs: Variable
Maintenance………………………………………………………………………………………………………………………………..
$0.50 $22,000 Maintenance 57,250 0.50 ←make changes here, please
Power………………………………………………………………………………………………………………………………..
0.40 17,600 Indirect labor 43,500 0.40
Indirect labor………………………………………………………………………………………………………………………………..
2.10 92,400 Rent 39,000 2.10
Total variable costs………………………………………………………………………………………………………………………………..
Maintenance………………………………………………………………………………………………………………………………..
Indirect labor………………………………………………………………………………………………………………………………..
Rent………………………………………………………………………………………………………………………………..
Total fixed costs………………………………………………………………………………………………………………………………..
20% lower:
Formula
Variable costs:
Maintenance………………………………………………………………………………………………………………………………..
$0.50 $16,000
← links
Power………………………………………………………………………………………………………………………………..
0.40 12,800
Indirect labor………………………………………………………………………………………………………………………………..
2.10 67,200
Total variable costs………………………………………………………………………………………………………………………………..
Maintenance………………………………………………………………………………………………………………………………..
Indirect labor………………………………………………………………………………………………………………………………..
Rent………………………………………………………………………………………………………………………………..
Total fixed costs………………………………………………………………………………………………………………………………..
Healthy Pet Company
Healthy Pet Company
Overhead Budget
For the Coming Year
Activity Level
44,000 Hours*
Overhead Budget
For the Coming Year
Activity Level
32,000 Hours*