Ceiling Fans by Ike's Overhead Budget for 2009 Was as Follows

question 36

Multiple Choice

Ceiling Fans by Ike's overhead budget for 2009 was as follows: $\begin{array}{|l|l|}\hline \text { Factory supervision } & \$ 300,000 \\\hline \text { Utilities costs } & 150,000 \\\hline \text { Insurance } & 28,000 \\\hline \text { Property taxes } & 22,000 \\\hline \text { Depreciation } & 100,000 \\\hline \text { Total } & \$ 600,000 \\\hline \end{array}$
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.
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What will be the value for utilities costs in the 2010 overhead budget?

• A) $420,000
• B) $150,000
• C) $300,000
• D) $450,000

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