Question

Atlanta Company is preparing its manufacturing overhead budget for 2014. Relevant data consist of the following.

Units to be produced (by quarters): 10,400, 12,900, 14,500, 16,100.

Direct labor: time is 1.6 hours per unit.

Variable overhead costs per direct labor hour: indirect materials $0.70; indirect labor $1.20; and maintenance $0.70

Fixed overhead costs per quarter: supervisory salaries $36,110; depreciation $17,010; and maintenance $14,100.

Prepare the manufacturing overhead budget for the year, showing quarterly data.

Answer 1

ATLANTA COMPANY Manufacturing Overhead Budget For the Year Ending December 31, 2014
	Quarter
	1	2	3	4	Year
Variable Costs
Indirect Materials (Units produced*Direct Labor hrs*Indirect materials Cost	11648	14448	16240	18032	60368
Indirect Labor Units produced*Direct Labor hrs*indirect labor	19968	24768	27840	30912	103488
Maintenance Units produced*Direct Labor hrs*Maintenance	11648	14448	16240	18032	60368
Total Variable	43264	53664	60320	66976	224224
Fixed Costs
Supervisory Salaries	36,110	36,110	36,110	36,110	144440
Depreciation	17,010	17,010	17,010	17,010	68040
Maintenance	14,100	14,100	14,100	14,100	56400
Total Fixed	67,220	67,220	67,220	67,220	268,880
Total Manufacturing Overhead	110,484	120,884	127,540	134,196	493,104
Direct labor hours Units produced*Direct Labor hrs	16640	20640	23200	25760	86240
Manufacturing overhead rate per direct labor hour					5.72