Question

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted direct labor-hours 10,800 9,600 9,908 10,780 The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $5.50 per direct labor-hour and its total fixed manufacturing overhead is $76,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $19,000 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 Complete this question by entering your answers in the tabs below Required 1 Required 2 Prepare the company's manufacturing overhead budget for the upcoming fiscal year Yuvwell Corporation Manufacturing Overhead Budget 1st Quarter 2nd Quarter 3rd Quarter 4th QuarterYear Variable manufacturing overhead rate Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Cash disbursements for manufacturing overhead

Answer 1

SOLUTION

1. Manufacturing overhead budget-

	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Budgeted direct labor hours	10,800	9,600	9,900	10,700	41,000
Variable overhead rate	$5.50	$5.50	$5.50	$5.50	$5.50
Variable manufacturing overhead	59,400	52,800	54,450	58,850	225,500
Fixed manufacturing overhead	76,000	76,000	76,000	76,000	304,000
Total manufacturing overhead	135,400	128,800	130,450	134,850	529,500
Less: Depreciation	(19,000)	(19,000)	(19,000)	(19,000)	(76,000)
Cash disbursements for manufacturing overhead	116,400	109,800	111,450	115,850	453,500

2. Predetermined overhead rate = Total budgeted manufacturing overhead / Total budgeted direct labor hours

= $529,500 / 41,000 = $12.91