Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevan
ID: 2588881 • Letter: A
Question
Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the following.
Units to be produced (by quarters): 10,400, 12,400, 14,200, 16,600. Direct labor: Time is 1.7 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.80; indirect labor $1.30; and maintenance $0.70. Fixed overhead costs per quarter: supervisory salaries $36,580; depreciation $17,620; and maintenance $13,700.
"11 Sprint 6:00 PM * 11% D. BACK Exercise 23-11 your answer is partially correct. Try again. Atilanta Company is preparing its manufacturing overhead budget for 2017, Relevant data consist of the following Units to be produced (by quarters): 10,400, 12,400, 14,200, 16,600 Direct labor: Time is 1.7 hours per unit variable overhead costs per direct labor hor: indirect materials $0.80; indirect labor 1.30; and maintenance so. Fixed overhead costs per quarter: supervisory salaries $36,580; depreciation $17,620; and maintenance $13,700 Prepare the manufacturing overhead budget for the yeat, showing quarterly data. (Round overhead rate to 2 decimal places, e.g. 1.25. List varlable expenses before fixed expense.) Masufacturing Overhead Badget Dinect labor hours Manefactaring everheed rate per direct labr ho Question Attempts: 1 of 3 used SAVE OR LATERSURRIT ANS
Explanation / Answer
Atlanta Company
Statement showing manufacturing overhead budget for the year – quarterly data:
Atlanta Company
Manufacturing Overhead Budget
for the year ended December 31, 2017
Quarter
1
2
3
4
Year
Variable Costs:
Indirect Materials @ $0.80 per hour
$14,144
$16,864
$19,312
$22,576
$72,896
Indirect Labor @ $1.30 per hour
$22,984
$27,404
$31,382
$36,686
$118,456
Maintenance @$0.70 per hour
$12,376
$14,756
$16,898
$19,754
$63,784
Total Variable Cost
$49,504
$59,024
$67,592
$79,016
$255,136
Fixed Costs:
Supervisory Salaries
$36,580
$36,580
$36,580
$36,580
$146,320
Depreciation
$17,620
$17,620
$17,620
$17,620
$70,480
Maintenance
$13,700
$13,700
$13,700
$13,700
$54,800
Total Fixed
$67,900
$67,900
$67,900
$67,900
$271,600
Total Manufacturing Overhead
$117,404
$526,736
Direct Labor Hours
17,680
21,080
24,140
28,220
91,120
Manufacturing overhead per direct labor hour
$5.78
Notes:
Quarter
1
2
3
4
Year
Number of units
10,400
12,400
14,200
16,600
53,600
Direct labor hours per 1 unit = 1.7 hours
direct labor hours
17,680
21,080
24,140
28,220
91,120
Total manufacturing overhead = $526,736
Total direct labor hours = 91,120
Manufacturing overhead rate = 526,736/91,120 = $5.78
Atlanta Company
Manufacturing Overhead Budget
for the year ended December 31, 2017
Quarter
1
2
3
4
Year
Variable Costs:
Indirect Materials @ $0.80 per hour
$14,144
$16,864
$19,312
$22,576
$72,896
Indirect Labor @ $1.30 per hour
$22,984
$27,404
$31,382
$36,686
$118,456
Maintenance @$0.70 per hour
$12,376
$14,756
$16,898
$19,754
$63,784
Total Variable Cost
$49,504
$59,024
$67,592
$79,016
$255,136
Fixed Costs:
Supervisory Salaries
$36,580
$36,580
$36,580
$36,580
$146,320
Depreciation
$17,620
$17,620
$17,620
$17,620
$70,480
Maintenance
$13,700
$13,700
$13,700
$13,700
$54,800
Total Fixed
$67,900
$67,900
$67,900
$67,900
$271,600
Total Manufacturing Overhead
$117,404
$526,736
Direct Labor Hours
17,680
21,080
24,140
28,220
91,120
Manufacturing overhead per direct labor hour
$5.78
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