Answer:
Total overhead= $1,563,800
Explanation:
Giving the following information:
The ending inventory must equal 10% of the next month's sales.
Beginning inventory for June= 30,000 units
June sales= 300,000 units
July sales= 310,000 units,
Trago assigns variable overhead at a rate of $3.80 per unit of production. Fixed overhead equals $420,000 per month.
First, we need to calculate the number of units to be produced in June:
June production= sales for June + desired ending inventory - beginning inventory
June production= 300,000 + 31,000 - 30,000
June production= 301,000 units
Now, we can calculate the total overhead:
Total overhead= variable overhead + fixed overhead
Total overhead= 3.80*301,000 + 420,000= $1,563,800
