Jim’s Landscaping is the business of maintaining and improving yards in surrounding areas. The company bases its overhead cost budgets on the following data
Variable overhead costs:
Supplies $4 per yard
Machine maintenance $2 per yard
Chemicals $6 per yard
Fixed overhead costs:
Salaries and wages $2300 per month
Machine maintenance $800 per month
Utilities $400 per month
Rent $1100 per month
In June, the following actual costs were incurred for 83 yards:
Supplies $320
Machine maintenance $180
Chemicals $500
Salaries and wages $2500
Depreciation $800
Utilities $450
Rent $1100
This is what I started with:
Variable overhead costs:
Supplies $4 per yard
Machine maintenance $2 per yard
Chemicals $6 per yard
Total variable cost $12
Fixed overhead cost
Salalries and wages $2,300 per month
Depreciation $ 800 per month
Utilities $ 400 per month
Rent $1,100 per month
Total Overhead cost $4,600