The estimated factory overhead costs necessary for production make up the factory overhead cost budget. This budget usually includes the total estimated cost for each item of factory overhead, as shown in the table below:

Colt Manufacturing, Inc.   Factory Overhead Cost Budget For the Year Ending December 31, 2008

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Indirect factory wages .........................................................................................................   732,800

Supervisor salaries ..............................................................................................................   360,000

Power and light ...................................................................................................................   306,000

Depreciation of plant and equipment ....................................................................................   288,000

Indirect materials .................................................................................................................  182,000

Maintenance .......................................................................................................................   140,280

Insurance and property taxes ...............................................................................................    79,200

Total factory overhead cost ...........................................................................................  $2,089,080

    
     A business may prepare supporting departmental schedules, in which the factory overhead costs are separated into their fixed and variable cost elements. Such schedules enable department managers to direct their attention to those costs for which they are responsible and to evaluate performance.