3 Exercise 8-5 Manufacturing Overhead Budget [LO8-6] The direct labor budget of
ID: 2561646 • Letter: 3
Question
3 Exercise 8-5 Manufacturing Overhead Budget [LO8-6] The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours: 10 points 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted direct labor-hours 8,200 8,300 8,600 8,000 eBook Hint Print The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $2.25 per direct labor-hour and its total fixed manufacturing overhead is $50,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $12,500 per quarter. Required References1. Prepare the company's manufacturing overhead budget for the upcoming fiscal year. 2. Compute the company's predetermined overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year.Explanation / Answer
1. PREPARE MANUFACTURING OVERHEAD BUDGET FOR THE YEAR :
2) Compute predetermine overhead rate :
Predetermine overhead rate = total overhead/total hours = 274475/33100 = 8.29 per labour hour
1st quarter 2nd quarter 3rd quarter 4th quarter year Budgeted labour hours 8200 8300 8600 8000 33100 variable overhead rate per hour 2.25 2.25 2.25 2.25 2.25 Variable manufacturing overhead 18450 18675 19350 18000 74475 Fixed manufacturing overhead 50000 50000 50000 50000 200000 Total manufacturing overhead 68450 68675 69350 68000 274475 Less: Depreciation (12500) (12500) (12500) (12500) (50000) Cash payment on manufacturing overhead 55950 56175 56850 55500 224475Related Questions
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