Yancey Company expects to produce 2,030 units in January that will require 8,120

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Yancey Company expects to produce 2,030 units in January that will require 8,120 hours of direct labor and 2,220 units in February that will require 8,880 hours of direct labor. Yancey budgets $6 per unit for variable manufacturing overhead: $1,700 per month for depreciation; and $87,550 per month for other fixed manufacturing overhead costs. Prepare Yancey's manufacturing overhead budget for January and February including the predetermined overhead allocation rate using direct labor hours as the allocation base. (Abbreviations used: VOH variable manufacturing overhead; FOH- fixed manufacturing overhead.) January February Total Budgeted units to be produced VOH cost per unit Budgeted VOH Budgeted FOH Depreciation Other FOH costs Total budgeted FOH Budgeted manufacturing overhead costs Direct labor hours Choose from any list or enter any number in the input fields and then continue to the next question

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SOLUTION

YANCEY COMPANY

Manufacturing Overhead Budget

For the Two Months Ended February 28

January February Total Budgeted units to be produced 2,030 2,220 4,250 Variable overhead cost per unit $6 $6 $6 Budgeted variable overhead (A) 12,180 13,320 25,500 Budgeted fixed overhead:   Depreciation 1,700 1,700 3,400   Other fixed overhead 87,550 87,550 175,100 Total budgeted fixed overhead (B) 89,250 89,250 178,500 Budgeted manufacturing overhead costs (A+B) $101,430 $102,570 $204,000 Direct labor hours 8,120 8,880 17,000 Predetermined overhead allocation rate ($204,000/17,000 labour hours) $12 per DLH

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