Atlanta Company is preparing its manufacturing overhead budget for 2017, Relevan

Question

Atlanta Company is preparing its manufacturing overhead budget for 2017, Relevant data consist of the following Units to be produced (by quarters): 10,600, 12,800, 14,400, 16,200. Direct labor: Time is 1.7 hours per unit Variable overhead costs per direct labor hour: indirect materials $o.80; indirect labor $1.20; and maintenance s0.60. Fixed overhead costs per quarter: supervisory salaries $38,710; depreciation $19,350; and maintenance $14,800. Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round ovethead rate to 2 decimal places, e.g. 1.25. List variable expenses before fixed expense.) ATLANTA COMPANY Overhead Budget Quarter Year Variable Costs 10,600 12,800 14,400 16,200 201 Indirect Materials Maintenance Total Variable Fixed Costs

Explanation / Answer

BUDGETED LABOUR HOURS Q-1 Q-2 Q-3 Q-4 YEAR Budgeted production units 10600 12800 14400 16200 54000 labour hour per unit 1.7 1.7 1.7 1.7 1.7 Budgeted labouor hours 18020 21760 24480 27540 91800 MANUFACTURING OVERHEADS BUDGET Q-1 Q-2 Q-3 Q-4 YEAR Variable Cost: Indirect material 14416 17408 19584 22032 73440 Indirect Labour 21624 26112 29376 33048 110160 maintenance 10812 13056 14688 16524 55080 Total variable cost 46852 56576 63648 71604 238680 Fixed Cost: Supervisory salaries 38710 38710 38710 38710 154840 Depreciation 19350 19350 19350 19350 77400 Maintenance 14800 14800 14800 14800 59200 Total fixed cost 72860 72860 72860 72860 291440 Total Manufacturing OH 119712 129436 136508 144464 530120 Budgeted Labour hours 18020 21760 24480 27540 91800 manufacturing OH rate per Labouor hour 5.775

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