Unit variable expense = Selling price x 3% commission

$15 x 3% = 0.45
15,000 – 7,600 = 7,400
Solution:
Direct labor hours 238,000 (170,000 x 1.4)
Variable overhead rate 1.15 (221,000 + 52,000 = 273,000/238,000)
Total fixed overhead 454,800

Budgeted direct labor hours 238,000

Variable overhead rate 1.15
Budgeted variable overhead 273,700
Budgeted fixed overhead 454,800
Solution:
2.
Fixed overhead rate 1.91 (454,800/238,000)
Total overhead rate 3.06 (728,500/238,000)

3. What if: 168,000 units

168,000 x 1.4 = 235,200
Fixed overhead rate 1.93 (454,800/235,200)
Total overhead rate 3.08 (725,280/235,200)
Ending inventory:
17,000 + 360,000 – 343,000 = 34,000
34,000 x 4.85 = 164,900
Solution:
What if: 375,000
17,000 + 360,000 – 375,000 = 2,000
2,000 x 4.85 = 9,700
Solution:
Budgeted direct materials (400,000 x 1.75) 700,000
Budgeted direct labor (400,000 x 0.45) 180,000
Budgeted overhead
Fixed overhead (400,000 x 0.80) 320,000
Variable overhead (400,000 x 1.90) 760,000 1,080,000
Total budgeted manufacturing cost 1,960,000