Question

Ayayal Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the Tollowing. Units to be produced (by quarters): 10.100, 12, 100, 14,100,16,100. Direct labor: Time is 1.5 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.70; indirect labor $1.20; and maintenance $0.50. Fixed overhead costs per quarter: supervisory salaries $36,000; depreciation $17,000; and maintenance $13,000. Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal places, e.g. 1.25. List variable costs before fixed costs.) AYAYAI COMPANY Manufacturing Overhead Budget Quarter 1 Variable Costs Indirect Materials Direct labor hours Manufacturing overhead rate per direct labor hour

Answer 1

AYAYAI COMPANY Manufacturing Overhead Budget For the Year Ending December 31,2017 Quarter 2 3 4 Variable Cost Indirect Materials S 10.605 S 12.705 S 14.805S 16,905 Indirect Labor S 18,180 $ 21,780 $ 25,380 S 28.980 Maintenanace $ 7,575 S 9,075 S 10.575 S 12.075 Total Variable Costs S 36,360 S 43,560 S 50,760 $ 57,960 Fixed Costs Supervisory salaries $ 36,000 $ 36,000 $ 36,000 S 36.000 Depreciation S 17,000 $ 17,000 S 17,000 S 17,000 Maintenance S 13,000 S 13,000 S 13,000 S 13,000 Total Fixed Cost $ 66,000 $ 66,000 $ 66,00066,000 Total Manufacturing Overhead | $ 102,360 $109,560 $116.760 S123.960 Variable Costs -1 Indirect Materials = 10.100*1.5*$0.70 = $10.605 Indirect Labor = 10.100*1.5*$1.20 = $18,180 Maintenanace = 10.100*1.5*$0.50 = $7,575

Variable Costs - 2 Indirect Materials = 12,100*1.5*$0.70 = $12,705 Indirect Labor = 12.100*1.5*$1.20 = $21.780 Maintenanace = 12,100*1.5*$0.50 = $9,075 Variable Costs - 3 Indirect Materials = 14.100*1.5*$0.70 = $14,805 Indirect Labor = 14.100*1.5*$1.20 = $25.380 Maintenanace = 14,100*1.5*$0.50 = $10,575 Variable Costs - 4 Indirect Materials = 16,100*1.5*$0.70 = $16,905 Indirect Labor = 16.100*1.5*$1.20 = $28.980 Maintenanace = 16,100*1.5*$0.50 = $12,075 Total Labor Hours = (10,100+12,100+14,100+16,100)*1.5 = 78,600 hours Total Mnaufacturing overhead = $102,360+$109,560+$116,760+$123.960 = $425,640 Manufacturing overhead rate per direct labor hour = $425,640/78,600 = $5.42