Problem:
Keegan Company manufactures a single product and has a policy that ending inventory must equal 10% of the next month's sales. It estimates that May's ending inventory will consist of 28,800 units. June and July sales are estimated to be 288,000 and 298,000 units, respectively. Keegan assigns variable overhead at a rate of $2.60 per unit of production. Fixed overhead equals $408,000 per month.
Required:
Question: Compute the number of units to be produced and use to compute the total budgeted overhead that would appear on the factory overhead budget for month ended June 30.
Note: Please provide step by step solution.