The direct labor budget of Yuvwell Corporation for the upcoming fiscal year cont
ID: 2567425 • 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 10,600 9,500 9,800 10,600 The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $5.25 per direct labor-hour and its total fixed manufacturing overhead is $74,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $18,500 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.
The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours: lst Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted direct labor-hours 10,600 9,500 9,800 10,600 The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $5.25 per direct labor-hour and its total fixed manufacturing overhead is $74,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $18,500 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.Explanation / Answer
Prepare manufacturing overhead budget :
Calculate predetermined overhead rate for the year :
Predetermine overhead rate = 508625/40500 = 12.56 per hour
1st quarter 2nd quarter 3rd quarter 4th quarter year Direct labour hour 10600 9500 9800 10600 40500 Variable manufacturing overhead per labour hour 5.25 5.25 5.25 5.25 5.25 Total Variable manufacturing overhead 55650 49875 51450 55650 212625 Fixed manufacturing overhead 74000 74000 74000 74000 296000 Total manufacturing overhead 129650 123875 125450 129650 508625 Less: depreciation (18500) (18500) (18500) (18500) (74000) Cash disbursement for manufacturing overhead 111150 105375 106950 111150 434625