The direct labor budget of Yuvwell Corporation for the upcoming fiscal year cont
ID: 2543481 • Letter: T
Question
The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours:
The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $5.00 per direct labor-hour and its total fixed manufacturing overhead is $72,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $18,000 per quarter.
Required:
1. Prepare the company’s manufacturing overhead budget for the upcoming fiscal year.
2. Compute the company’s predetermined overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year.
Prepare the company’s manufacturing overhead budget for the upcoming fiscal year.
Compute the company’s predetermined overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year. (Round your answer to 2 decimal places.)
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted direct labor-hours 10,400 9,400 9,700 10,500Explanation / Answer
1. Prepare the company’s manufacturing overhead budget for the upcoming fiscal year.
Predetermine overhead rate for the year = 488000/40000= 12.20 per labour hour
Yuvwell Corporation Manufacturing Overhead Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Budgeted direct labor-hours 10400 9400 9700 10500 40000 Variable manufacturing overhead rate 5 5 5 5 5 Variable manufacturing overhead 52000 47000 48500 52500 200000 Fixed manufacturing overhead 72000 72000 72000 72000 288000 Total manufacturing overhead 124000 119000 120500 124500 488000 Less: Depreciation (18000) (18000) (18000) (18000) (72000) Cash disbursements for manufacturing overhead 106000 101000 102500 106500 416000