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Overhead cost

Hatzenbuhler Manufacturing Corporation has prepared the following overhead budget for next month.

Activity level 6,500 machine-hours
Variable overhead costs:
Supplies 23,350
Indirect labor 53,350
Fixed overhead costs:
Supervision 20,300
Utilities 5,800
Depreciation 7,400
Total overhead cost 110,200

The company's variable overhead costs are driven by machine-hours.
What would be the total budgeted overhead cost for next month if the activity level is 6,200 machine-hours rather than 6,500 machine-hours? Assume that the activity levels of 6,500 machine-hours and 6,200 machine-hours are within the same relevant range.


Solution Summary

The solution explains the calculated of budgeted overhead cost.