Atlanta Company is preparing its manufacturing overhead budget for 2014. Relevan

Question

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

Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal places, e.g. 1.25. List variable expenses before fixed expense.)

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

Quarter

1

2

3

4

Year

Indirect Materials:

Indirect Labor:

Maintenance:

Total Variable:

Fixed Costs:

Supervisory Salaries:

Depreciation:

Maintenance:

Total Fixed:

Total Manufacturing Overhead:

Direct Labor hours:

Manufacturing overhead rate per direct labor hour:

Units to be produced (by quarters): 10,700, 12,700, 14,200, 16,700. Direct labor: Time is 1.5 hours per unit. Variable overhead costs per direct labor hour: Indirect materials $0.80; indirect labor $1.30; and maintenance $0.60 Fixed overhead costs per quarter: Supervisory salaries $37,200; depreciation $18,380; and maintenance $14,210.

Explanation / Answer

Atlanta Company Manufacturing Overhead Budget For the year ending december 31,2014 Quarter 1 2 3 4 Total Units 10700 12700 14200 16700 54300 Variable Cost: Indirect Materials: 8560 10160 11360 13360 43440 indirect labour: 13910 16510 18460 21710 70590 Maintanance : 6420 7620 8520 10020 32580 Total Variable 28890 34290 38340 45090 146610 Fixed cost Supervisory Salaries: 37200 37200 37200 37200 148800 Depreciation 18380 18380 18380 18380 73520 Maintanance : 14210 14210 14210 14210 56840 Total Fixed : 69790 69790 69790 69790 279160 Total Manufacturing Overhead: 98680 104080 108130 114880 425770 Direct Labour hours: 16050 19050 21300 25050 81450 Manufacturing overhead rate per direct labour 6.15 5.46 5.08 4.59

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