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 3,800 direct labor-hours will be required in September. The variable overhead rate is $6 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,220 per month, which includes depreciation of $3,540. All other fixed manufacturing overhead costs represent current cash flows. The September cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

Explanation / Answer

a Budgeted Labour Hours 3800 b Variable OH rate per hour $6 c Variable OH cost for the month ($) (a*b) 22800 d Fixed Manufacturng OH including depreciation ($) 43220 e Depreciation 3540 f Cash flow on Fixed Manufacturing OH (d-e) 39680 g Total cash disbursement on manfacturing OH (f+c) 62480

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