The manufacturing overhead budget at Cutchin Corporation is based on budgeted di

Question

The manufacturing overhead budget at Cutchin Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,800 direct labor-hours will be required in September. The variable overhead rate is $7.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,120 per month, which includes depreciation of $3,640. All other fixed manufacturing overhead costs represent current cash flows. The September cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

A. $59,080

B. $62,720

C. $19,600

D. $39,480

Explanation / Answer

A. $59,080

Manufacturing Overhead Budget

September Budgeted direct labor-hours 2,800 Variable manufacturing overhead rate × $7.00 Variable manufacturing overhead $19,600 Fixed manufacturing overhead $43,120 Total manufacturing overhead $62,720 Less depreciation $3,640 Cash disbursement for manufacturing overhead $59,080

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