Chamberlin Company estimates that 347,800 direct labor hours will be worked during the coming year, 2012, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year.
| Fixed Overhead Costs |
|
Variable Overhead Costs |
| Supervision |
|
$93,120 |
|
Indirect labor |
|
$107,818 |
| Depreciation |
|
57,000 |
|
Indirect materials |
|
86,950 |
| Insurance |
|
31,200 |
|
Repairs |
|
69,560 |
| Rent |
|
24,960 |
|
Utilities |
|
73,038 |
| Property taxes |
|
14,400 |
|
Lubricants |
|
27,824 |
|
|
$220,680 |
|
|
|
$365,190 |
It is estimated that direct labor hours worked each month will range from 22,600 to 33,400 hours.
During October, 22,600 direct labor hours were worked and the following overhead costs were incurred.
Fixed overhead costs: Supervision $7,760, Depreciation $4,750, Insurance $2,561, Rent $2,080, and Property taxes $1,200.
Variable overhead costs: Indirect labor $7,870, Indirect materials, $5,288, Repairs $4,444, Utilities $5,080, and Lubricants $2,066.
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