ATLANTA COMPANY Manufacturing Overhead Budget For the Year Ending December 31, 2

Question

ATLANTA COMPANY
Manufacturing Overhead Budget
For the Year Ending December 31, 2014

Quarter

1

2

3

4

Year

Variable costs:

Fixed costs:

Altanta Company is preparing its manufacturing overhead budget for 2014. Relevant data consist of the following.

Units to be produced (by quarters): 10,500, 12,100, 14,100, 17,600.

Direct labor: time is 1.57 hours per unit.

Variable overhead costs per direct labor hour: indirect materials $0.87; indirect labor $1.26; and maintenance $0.32.

Fixed overhead costs per quarter: supervisory salaries $34,800; depreciation $15,100; and maintenance $11,100.

Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal places, e.g. 2.58.)

ATLANTA COMPANY
Manufacturing Overhead Budget
For the Year Ending December 31, 2014

Quarter

1

2

3

4

Year

Variable costs:

Indirect Materials

$

$

$

$

$

Indirect Labor

Maintenance

Total Variable Costs

Fixed costs:

Supervisory Salaries

Depreciation

Maintenance

Total Fixed Costs

Total Manufacturing Overhead

$

$

$

$

$

Direct Labor Hours

Manufacturing Overhead Rate Per Direct Labor Hour

Explanation / Answer

Particulars Quarter 1 Quarter 2 Quarter 3 Quarter 4 Units 10500 12100 14100 17600 Direct Labor time per unit 1.57 1.57 1.57 1.57 Total Direct Labor hours 16485 18997 22137 27632 Variable Overhead Indirect Materials      14,341.95      16,527.39      19,259.19      24,039.84 Indirect Labor      20,771.10      23,936.22      27,892.62      34,816.32 Maintenance        5,275.20        6,079.04        7,083.84        8,842.24 Fixed Overhead Supervisory Salaries      34,800.00      34,800.00      34,800.00      34,800.00 Depreciation      15,100.00      15,100.00      15,100.00      15,100.00 Maintenance      11,100.00      11,100.00      11,100.00      11,100.00 Total Manufacturing Overhead    101,388.25    107,542.65    115,235.65    128,698.40 Direct labor hours      16,485.00      18,997.00      22,137.00      27,632.00 Manufacturing overhead rate per labor hour                 6.15                 5.66                 5.21                 4.66

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