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In the Sheridan Company, indirect labor is budgeted for $68000 and factory supervision is budgeted for $34000 at normal capacity of 170000 direct labor hours
In the Sheridan Company, indirect labor is budgeted for $68000 and factory supervision is budgeted for $34000 at normal capacity of 170000 direct labor hours. If 190000 direct labor hours are worked, flexible budget total for these costs is
Expert Solution
Computation of Flexible Budget Total for these Costs:
Flexible Budget Total = Variable Cost at 190,000 Direct labor Hours + Fixed Cost
Here,
Variable Cost = $68,000/170,000 = $0.40 per direct labor hour
Fixed Cost = Factory Supervision = $34,000
Flexible Budget Total = $ 0.40 per Direct labor Hour * 190,000 Direct labor Hours+ $ 34,000
= $76,000+ $34,000
Flexible Budget Total = $110,000
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