Principles of Cost Accounting: P4-5 Listed below are the budgeted factory overhead costs for 2011

Principles of Cost Accounting

P4-5 Budgeted factory overhead costs
Listed below are the budgeted factory overhead costs for 2011 for Valpo Manufacturing Inc. at a projected level of 2,000 units.

Expenses:

Indirect materials 10,000

Indirect labor 20,000

Power 15,000

Straight-line depreciation 30,000

Factory property tax 28,000

Factory insurance 22,000

Total $125,000

Required:
Prepare flexible budgets for factory overhead at the 1,000, 2000, and 4,000 units level. (Hint: You must first decide which of the listed costs should be considered variable and which should be fixed).
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