The direct labor budget of ABC Corporation for the upcoming fiscal year includes
ID: 2418274 • Letter: T
Question
The direct labor budget of ABC Corporation for the upcoming fiscal year includes the following budgeted direct labor-hours.
1st quarter 2nd quarter 3rd quarter 4th quarter
Budgeted direct labor-hours………. 5,000 4,800 5,200 5,400
The company’s variable manufacturing overhead rate is $1.75 per direct labor-hour and the company’s fixed manufacturing overhead is $35,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $11,,000 per quarter.
Required:
Construct the company’s manufacturing overhead budget for the upcoming fiscal year.
Compute the company’s manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year. Round off to the nearest whole cent.
1st quarter 2nd quarter 3rd quarter 4th quarter
Budgeted direct labor-hours………. 5,000 4,800 5,200 5,400
Explanation / Answer
Sl No Particulars Rate per DLH Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total A Budgeted DLH 5,000.00 4,800.00 5,200.00 5,400.00 20,400.00 B Variable Overhead 1.75 8,750.00 8,400.00 9,100.00 9,450.00 35,700.00 C Fixed Overhead 35,000.00 35,000.00 35,000.00 35,000.00 140,000.00 D Total Manufacturing Overhead( B +C) 175,700.00 E Manufacturing Overhead Rate (D /A) 8.61