VIPSolutionsInterpreting Cost Formula Wylie Enterprises' controller, Josh Senior, estimated the following formula, based on monthly data, for total overhead cost: Overhead costs = \$161,500 + (\$41.50 × Direct labor hours) Required 2) If next month's budgeted direct labor hours equal 8,000, and are within the relevant range, what is the budgeted overhead cost? $__________ 3. If next quarter's budgeted direct labor hours equal 26,000, and are within the relevant range, what is the budgeted overhead cost? $ _________ 4. If next year's budgeted direct labor hours equal 101,250, and are within the relevant range, what is the budgeted overhead cost? $ ________
Question:
Interpreting Cost Formula Wylie Enterprises' controller, Josh Senior, estimated the following formula, based on monthly data, for total overhead cost: Overhead costs = \$161,500 + (\$41.50 × Direct labor hours) Required 2) If next month's budgeted direct labor hours equal 8,000, and are within the relevant range, what is the budgeted overhead cost? $__________ 3. If next quarter's budgeted direct labor hours equal 26,000, and are within the relevant range, what is the budgeted overhead cost? $ _________ 4. If next year's budgeted direct labor hours equal 101,250, and are within the relevant range, what is the budgeted overhead cost? $ ________
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Asked by: Test User 100100
Created at: 2025-05-18 07:07:35
Asked by: Test User 100100
Created at: 2025-05-18 07:07:35
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Let's use the cost formula:
**Overhead costs = \$161,500 + (\$41.50 × Direct labor hours)**
Let's solve each question:
---
### 2) **If next month's budgeted direct labor hours = 8,000**
\[
\text{Overhead costs} = \$161,500 + (\$41.50 \times 8,000)
\]
\[
= \$161,500 + \$332,000
\]
\[
= \$493,500
\]
**Answer:**
$**493,500**
---
### 3) **If next quarter's budgeted direct labor hours = 26,000**
\[
\text{Overhead costs} = \$161,500 + (\$41.50 \times 26,000)
\]
\[
= \$161,500 + \$1,079,000
\]
\[
= \$1,240,500
\]
**Answer:**
$**1,240,500**
---
### 4) **If next year's budgeted direct labor hours = 101,250**
\[
\text{Overhead costs} = \$161,500 + (\$41.50 \times 101,250)
\]
\[
= \$161,500 + \$4,203,375
\]
\[
= \$4,364,875
\]
**Answer:**
$**4,364,875**
---
**Summary of answers:**
2) $493,500
3) $1,240,500
4) $4,364,875
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