Meeting the goals:
• The volume needed from January to August is $644,000 to meet overhead and to make a profit. However, $739,490 in actual volume has been obtained. Actual volume is now exceeding required volume by $95,490.
|
Month |
Volume Needed |
Volume Obtained |
|
January |
$80,500.00 |
$76,400.00 |
|
February |
80,500.00 |
94,650.00 |
|
March |
80,500.00 |
86,880.00 |
|
April |
80,500.00 |
92,290.00 |
|
May |
80,500.00 |
71,000.00 |
|
June |
80,500.00 |
116,000.00 |
|
July |
80,500.00 |
99,720.00 |
|
August |
80,500.00 (644,000) |
102,550.00 (739,490) |
|
September |
80,500.00 |
|
|
October |
80,500.00 |
|
|
November |
80,500.00 |
|
|
December |
80,500.00 |
|
|
Total |
$966,000.00 |
|
What does this mean?
• Known overhead per month $10,000.00
• Number of months from January to August 8
• Months x know monthly overhead = $80,000.00
• Volume needed for known overhead $644,000.00
• Actual volume obtained $739,490.00
• $739,490.00 - $644,000.00 = $95,490.00
• $95,490.00 - 5% profit = $90,715.00
• $90,715.00 x 15% overhead markup $13,607.00
Therefore:
• $93,607.00 has been obtained to pay for
80,000.00 of actual overhead, leaving
$13,607.00 in excess overhead money