Problem:
Keegan Company manufactures a single product and has a policy that ending inventory must equal 20% of the next month's sales. It estimates that May's ending inventory will consist of 58,200 units. June and July sales are estimated to be 291,000 and 301,000 units, respectively. Keegan assigns variable overhead at a rate of $2.90 per unit of production. Fixed overhead equals $411,000 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 explain comprehensively and give step by step solution.