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The master budget of Sheffield Corp. shows that the planned activity level for next year is expected to be 50000 machine hours. At this level of activity, the following manufacturing overhead costs are expected: Indirect labor$730000 Machine supplies200000 Indirect materials220000 Depreciation on factory building120000 Total manufacturing overhead $1270000 A flexible budget for a level of activity of 60000 machine hours would show total manufacturing overhead costs of

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Answer:

Total overhead= $1,500,000

Explanation:

Giving the following information:

First, we need to separate the variable overhead and the fixed overhead:

Variable overhead:

Indirect labor 730,000

Machine supplies 200,000

Indirect materials 220,000

Total variable overhead= $1,150,000

Fixed overhead:

Depreciation on factory building $120,000

Now, we need to calculate the unitary variable overhead:

unitary variable overhead= 1,150,000/50,000= $23

Finally, the total overhead for 60,000 units:

Total overhead= 23*60,000 + 120,000

Total overhead= $1,500,000