Question

The manufacturing overhead budget of Inch Corporation is based on budgeted direct labor-hours. The September direct labor budget indicates that 4,400 direct labor-hours will be required in that month. The variable overhead rate is $5.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $59,400 per month, which includes depreciation of $10,560. All other fixed manufacturing overhead costs represent current cash flows. Required: Determine the cash disbursement for manufacturing overhead for September (present with no decimal places). $ 70840 Determine the predetermined overhead rate for September. (round to 2 decimal place) $

Answer 1

$70,840; $18.50

Step-by-step explanation:

Variable manufacturing overhead:

= Budgeted direct labor-hours × Variable overhead rate

= 4,400 × $5

= $22,000

Total manufacturing overhead:

= Variable manufacturing overhead + Fixed manufacturing overhead

= $22,000 + $59,400

= $81,400

(a) cash disbursement for manufacturing overhead for September:

= Total manufacturing overhead - Depreciation

= $81,400 - $10,560

= $70,840

(b) Predetermined overhead rate for September:

= Total manufacturing overhead ÷ Budgeted direct labor-hours

= $81,400 ÷ 4,400

= $18.50