QUESTION 5:
The overhead costs in a factory, where a single product is manufactured, comprise a variable element and a stepped-fixed element. The variable cost element is $2.4 per direct labor hour. 0.9 direct labor hours are required per unit of the product. The fixed cost is $230,000 per period but is subject to an increase of $15,000 per period when output exceeds 60,000 units. In period 2, the budgeted output was 58,000 units and the actual output was 62,500 units.
What was the fixed budget for factory overheads in period 2? (show your working)