Question

3. Manufacturing overhead budget The following is the direct labor budget for XYZ Co. Quarter Units to be produced 1.600 1.270 2.900 1,950 XYZ Co management estimated that the time required to manufacture one unit of finished goods is 25 direct labor hours. Variable overhead is based on direct labor hours at a rate of $7 per direct labor hour. Fixed overhead is $3.650 per quarter. Required: Prepare a manufacturing overhead budget for the four quarters and the year. Units to be produced Direct labor hours per unit Total hours Variable overhead rate Variable overhead Fixed Overhead Total Overhead

Answer in excel!

Answer 1

Solution

XYZ CO.
Manufacturing Overhead Budget
	Q1	Q2	Q3	Q4	Year
Units to be produced	1600	1270	2900	1950	7720
Direct Labor Hours per unit	0.25	0.25	0.25	0.25	0.25
Total hours	400	317.5	725	487.5	1930
Variable overhead rate	$                  7.00	$                   7.00	$                   7.00	$                     7.00	$                   7.00
Variavle overhead	$         2,800.00	$          2,222.50	$           5,075.00	$             3,412.50	$        13,510.00
Fixed Manufacturing Overhead	$         3,650.00	$          3,650.00	$           3,650.00	$             3,650.00	$        14,600.00
Total Overhead	$         6,450.00	$          5,872.50	$           8,725.00	$             7,062.50	$        28,110.00