The direct labor budget of Yuvwell Corporation for the upcoming fiscal year cont
ID: 2559289 • Letter: T
Question
The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted direct labor-hours 12,000 10,200 10,500 11,300 The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $700 per direct labor-hour and its total fixed manufacturing overhead is $88,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $22,000 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 yearExplanation / Answer
Answer:
1
Unwell Corporation
Manufacturing Overhead Budget
1st
2nd
3rd
4th
Year
Quarter
Quarter
Quarter
Quarter
Budgeted direct labor-hours
12000
10200
10500
11300
44000
Variable overhead rate
× 7
× 7
× 7
× 7
× 7
Variable manufacturing overhead
84000
71400
73500
79100
308000
Fixed manufacturing overhead
88,000
88,000
88,000
88,000
352000
Total manufacturing overhead
172,000
159,400
161,500
167,100
660,000
Less depreciation
22,000
22,000
22,000
22,000
88000
Cash disbursements for manufacturing overhead
150,000
137,400
139,500
145,100
572,000
__________________________________________
2
Predetrmined overhead rate for the year
15
Working notes for the answer:
Total manufacturing overhead
660,000
Divided by : Budgeted Direct labor
hours for the year
44000
Predetrmined overhead rate for the year
15
Unwell Corporation
Manufacturing Overhead Budget
1st
2nd
3rd
4th
Year
Quarter
Quarter
Quarter
Quarter
Budgeted direct labor-hours
12000
10200
10500
11300
44000
Variable overhead rate
× 7
× 7
× 7
× 7
× 7
Variable manufacturing overhead
84000
71400
73500
79100
308000
Fixed manufacturing overhead
88,000
88,000
88,000
88,000
352000
Total manufacturing overhead
172,000
159,400
161,500
167,100
660,000
Less depreciation
22,000
22,000
22,000
22,000
88000
Cash disbursements for manufacturing overhead
150,000
137,400
139,500
145,100
572,000