The following budget data pertain to the Machining Department of Yolkenverst Co.:

ourFixed factory overhead$433,500

The company prepared the budget at 85% of the maximum capacity level. The department uses machine hours as the basis for applying standard factory overhead costs to production.
The budgeted total factory overhead for the Machining Department, rounded to the nearest dollar, is:

$892,500


1. Budgeted total overhead = Budgeted fixed overhead + Budgeted variable overhead.

2. Budgeted fixed overhead = $433,500 (given).

3. Denominator volume level = 60,000 units × 2.5 machine hours/unit × 0.85 = 127,500 machine hours.

4. Budgeted variable overhead = $3.60/machine hour (given) ×127,500 machine hours = $459,000.

5. Therefore, budgeted total overhead = Budgeted fixed overhead + Budgeted variable overhead = $433,500 + $459,000 = $892,500 (to nearest whole dollar).