Question

Manufacturing Overhead Budget

The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details conceming budgeted direct labor-hours:

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

   Budgeted direct labor-hours .................. 8,000 8,200 8,500 7,800

The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $3 25 per direct labor-hour and its total fixed manufacturing overhead is $48.000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $16,000 per quarter.

Required:

1. using Schedule 5 as your guide,prepare the company's manufacturing overhead budget for Using Schedule 5 as your guide upcoming fiscal year

2. Compute the company's predetermined overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year Round off to the nearest whole cent.

Answer 1

Yuvwell Corporation
Manufacturing overhead budget
	1st quarter	2nd quarter	3rd quarter	4th quarter	Year
Budgeted direct labor hour	$                   8,000	$        8,200	$        8,500	$        7,800	$        32,500
Variable manufacturing overhead rate	$                          3	$               3	$               3	$               3	$                 3
Variable manufacturing overhead	$                 26,000	$      26,650	$      27,625	$      25,350	$      105,625
Fixed manufacturing overhead	$                 48,000	$      48,000	$      48,000	$      48,000	$      192,000
Total manufacturing overhead	$                 74,000	$      74,650	$      75,625	$      73,350	$      297,625
Less: Depreciation	$                 16,000	$      16,000	$      16,000	$      16,000	$        64,000
Cash disbursement on manufacturing overhead	$                 58,000	$      58,650	$      59,625	$      57,350	$      233,625

Estimated manufacturing overhead	$       297,625
Divide : Estimated labor hour	32,500
Predetermine overhead rate	$ 9.16