Question

Prepare a manufacturing overhead budget for the year. LO 3), AP E21-11 Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the following. Units to be produced (by quarters): 10,000, 12,000, 14,000, 16,000. Direct labor: time is 1.5 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.80; indirect labor $1.20; and maintenance $0.50. Fixed overhead costs per quarter: supervisory salaries $35,000; depreciation $15,000 and maintenance $12,000 XLS Instructions Prepare the manufacturing overhead budget for the year, showing quarterly data.

Answer 1

Manufacturing Overheads Budget
			Q1	Q2	Q3	Q4	Year
Units produced			10000	12000	14000	16000	52000
Labour hours per unit			1.5	1.5	1.5	1.5	1.5
Budgeted labour hours			15000	18000	21000	24000	78000
variable cost:
Indirect material@ 0.8 per DLH			12000	14400	16800	19200	62400
Indirect labour @ 1.20 per DLH			18000	21600	25200	28800	93600
Maintenance @ 0.50 per DLH			7500	9000	10500	12000	39000
Total variable Overheads			37500	45000	52500	60000	195000
Fixed cost:;
Supervisory salaries			35000	35000	35000	35000	35000
Depreciation			15000	15000	15000	15000	15000
Maintenance			12000	12000	12000	12000	12000
Total Fixed Overheads			62000	62000	62000	62000	62000
Total Manufacturing overheads			99500	107000	114500	122000	257000
Divide: DLH							78000
Manufacturing OH per DLH							3.294872