Question

PRINTER VERSION BACK NEXT Exercise 5-18 Crane Sleep Systems manufactures nylon mesh hammocks for a chain of retail outlets located throughout the southeast. The company plans to manufacture and sell 28,000 hammocks during the fourth quarter. Overhead costs are expected to include: Variable indirect materials Variable indirect labor Other vanable overhead Salaries Insurance Deprecation $ 5.50 per hammock $ 12.00 per hammock $ 2.00 per hammock $75,000 per quarter $5,000 per quarter $ 35,000 per quarter Prepare Crane's manufacturing overhead budget for the fourth quarter. 4th Quarter Variable overhead Fixed overhead

Answer 1

Answer:

	4the Quarter
Activity level	28,000
Variable ovehead:
Variable Indirect materials [28,000 x $5.50]	$154,000
Variable Indirect labor [28,000 x $12.00]	$336,000
Other variable overhead [28,000 x $2.00]	$56,000
Total variable costs (i)	$546,000
Fixed overhead:
Salaries	$78,000
Insurance	$5,000
Depreciation	$35,000
Total fixed costs (ii)	$118,000
Total cost (i+ii)	$664,000
Deduct:
Depreciation	($35,000)
Cash payments for overhead	$629,000