Question

The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted direct labor-hours 10,000 9,200 9,500 10,300 The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $3.25 per direct labor-hour and its total fixed manufacturing overhead is $48,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $16,000 per quarter. Prepare the company's manufacturing overhead budget for the upcoming fiscal year.

Answer 1

1st Quarter= 10,000*6.45= 64,500

2nd Quarter= 9,200*6.73= 61,916

3rd Quarter= 9,500*6.62= 62,890

4th Quarter= 10,300*6.36= 65,508

Total= $254,814

Step-by-step explanation:

Giving the following information:

Direct labor hours:

1st Quarter= 10,000

2nd Quarter= 9,200

3rd Quarter= 9,500

4th Quarter= 10,300

The variable portion of its predetermined manufacturing overhead rate is $3.25 per direct labor-hour.

The total fixed manufacturing overhead is $48,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $16,000 per quarter.

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Fixed costs= 48,000 - 16,000= 32,000

1st Quarter= (32,000/10,000)+3.25= 6.45

2nd Quarter= (32,000/9,200) + 3.25= 6.73

3rd Quarter= (32,000/9,500) + 3.25= 6.62

4th Quarter= (32,000/10,300) + 3.25= 6.36

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

1st Quarter= 10,000*6.45= 64,500

2nd Quarter= 9,200*6.73= 61,916

3rd Quarter= 9,500*6.62= 62,890

4th Quarter= 10,300*6.36= 65,508

Total= $254,814