Exercise 21-10 Atlanta Company is preparing its manufacturing overhead budget fo

Question

Exercise 21-10 Atlanta Company is preparing its manufacturing overhead budget for 2014. Relevant data consist of the following. Units to be produced (by quarters): 10,300, 12,800, 14,800, 16,900. Direct labor: time is 1.7 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.90; indirect labor $1.40; and maintenance $0.50 Fixed overhead costs per quarter: supervisory salaries $36,310; depreciation $18,140; and maintenance $13,700. Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal

Explanation / Answer

Mnufacturing OH budget Quarter-1 Quarter2 Quarter3 Quarter4 Total Production uniyts 10300 12800 14800 16900 54800 Labour hours per unit 1.7 1.7 1.7 1.7 1.7 Lbour hours required 17510 21760 25160 28730 93160 Variable OH: Indirect material 15759 19584 22644 25857 83844 Indirect labour 24514 30464 35224 40222 130424 Maintenance 8755 10880 12580 14365 46580 Total variable 49028 60928 70448 80444 260848 Fixed OH: Supervisory salaries 36310 36310 36310 36310 36310 Depreciation 18140 18140 18140 18140 18140 maintenance 13700 13700 13700 13700 13700 Total fixed cost 68150 68150 68150 68150 68150 Total Manufacturing OH 117178 129078 138598 148594 328998 Total labour hours 17510 21760 25160 28730 93160 Manufacturing OH rate per DLH 3.53

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