Direct labor cost is 18000000 for both 2009 and 2010 each

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Reference no: EM13579077

Ceiling Fans by Ike's 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.If the expected 2010 expense for factory supervision and for utilities costs is $500,000 and $250,000, respectively, then the total for the 2010 overhead budget.

	a.	$800,000.
	b.	$750,000.
	c.	$900,000.
	d.	$650,000

Reference no: EM13579077

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