Problem: Hardball Corporation uses the following cost formulas in its flexible budget for manufacturing overhead:
Item Cost Formula
Utilities… $6,000 per year, plus $0.30 per machine hour (MH)
Supplies… $10,000 per year, plus $0.80 per machine hour
Depreciation… $25,000 per year
Indirect labor… $21,000 per year, plus $0.40 per machine hour
Using these cost formulas, complete the following flexible budget:
Machine Hours
Cost Formula
Overhead Costs (per MH) 8,000 10,000 12,000
Variable overhead costs:
___________________ $_______ $_______ $_______ $_______
___________________ ________ ________ ________ ________
___________________ ________ ________ ________ ________
Total variable costs.... $_______ ________ ________ ________
Fixed overhead costs:
___________________ ________ ________ ________
___________________ ________ ________ ________
___________________ ________ ________ ________
___________________ ________ ________ ________
Total variable costs.... ________ ________ ________
Total overhead costs... $_______ $_______ $_______