Ceiling Fans by Ikes overhead budget for 2009 was as follows:
| Factory supervision |
$300,000
|
| Utilities costs |
150,000
|
| Insurance |
28,000
|
| Property taxes |
22,000
|
| Depreciation |
100,000
|
| Total |
$600,000
|
|
|
- 600,000 units were produced in 2009.
- Direct labor cost is $18,000,000.
- For both 2009 and 2010, each unit required 3 direct labor hours at $10 per hour.
- In 2010, property taxes, insurance, and depreciation are expected to stay at 2009 levels.
- Utilities costs vary proportionally with units produced.
- Factory supervision increases by increments of $30,000 for every 200,000 increase in direct labor hours.
- The 2010 expected production is 1,200,000 units.
What will be the value for utilities costs in the 2010 overhead budget?