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.
-
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

---

Definitions:

Liability Account

An accounting record of obligations or debts that a company owes to others, typically outside of the company.

Increase

An upward adjustment or growth in value, quantity, or size.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the ownership interest in the company.

Salaries

Compensation paid to employees for work performed, often expressed as an annual sum or hourly wage.