Erekes Manufacturing Corporation has prepared the following overhead budget for next month. Activity level 4,000 machine-hours Variable overhead costs: Supplies $ 24,000 Indirect labor 39,600 Fixed overhead costs: Supervision 14,000 Utilities 7,400 Depreciation 8,400 Total overhead cost $ 93,400 The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 3,900 machine-hours rather than 4,000 machine-hours

$91,810

Explanation:

The computation of total budgeted overhead cost is shown below:-

Variable overhead cost per unit = $24,000 + $39,600 ÷ 4,000

= $63,600 ÷ 4,000

= $15.9 per machine hour

Fixed overhead cost per unit = $14,000 + $7,400 + $8,400 ÷ 4,000

= $7.45 per machine hour

For next month Budgeted overhead cost

Variable overhead cost = 3,900 × $15.9

= $62,010

Fixed overhead cost = 4,000 × $7.45

= $29,800

Total budgeted overhead cost  = Variable overhead cost + Fixed overhead cost

= $62,010 + $29,800

= $91,810

the total budgeted overhead cost for the next month is $91,810 when the activity level is 3,900.

answer; personality;