Question

Yem Company expects to produce 2,030 units in January that will require 4,060 hours of direct labor and 2,280 units in February that will require 4,560 hours of direct labor. Yem budgets $12 per unit for variable manufacturing overhead; $1,100 per month for depreciation; and $3,210 per month for other fixed manufacturing overhead costs. Prepare Yem's manufacturing overhead budget for January and February, including the predetermined overhead allocation rate using direct labor hours as the allocation base. (Abbreviations used: VOH = variable manufacturing overhead; FOH = fixed manufacturing overhead.) Yem Company Manufacturing Overhead Budget Two Month Ended January 31 and February 28 January February Total VOH cost per unit Budgeted VOH Budgeted FOH Depreciation Other FOH costs Total budgeted FOH Budgeted manufacturing overhead costs Direct labor hours Budgeted manufacturing overhead costs Predetermined overhead allocation rate

Answer 1

Solution: Yem company Manufacturing Overhead Budget For the Two Months Ended February 28 January February Total Budgeted units to be produced 2030 2280 4310 VOH cost per unit C 12 12 12 Budgeted VOH 24360 27360 51720 Budgeted FOH: Depreciation 1100 1100 2200 Other FOH 3210 3210 6420 Total budgeted FOH 4310 4310 8620 Budgeted manufacturing overhead costs | 286701 31670 60340 4060 Direct labor hours Predetermined overhead allocation rate 2280 6340 9.52