Question

The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Units to be produced 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 10,500 9,500 11,500 12,500 Each unit requires 0.30 direct labor-hours and direct laborers are paid $12.50 per hour. In addition, the variable manufacturing overhead rate is $1.80 per direct labor-hour. The fixed manufacturing overhead is $85,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $25,000 per quarter.

Answer 1

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Years
Units to be produced	10500	9500	11500	12500	44000
labor hour per unit	0.30	0.30	0.30	0.30	0.30
Total hours required	3150	2850	3450	3750	13200
Variable overhead per unit	1.80	1.80	1.80	1.80	1.80
Total variable overhead	5670	5130	6210	6750	23760
Fixed overhead	85000	85000	85000	85000	340000
Total manufacturing overhead	90670	90130	91210	91750	363760
Less: Depreciation	25000	25000	25000	25000	100000
Cash disbursement for manufacturing overhead	65670	65130	66210	66750	263760