Question

Sheridan Company is planning to sell 900 boxes of ceramic tile, with production estimated at 670 boxes during May. Each box of tile requires 44 pounds of clay mix and a 0.25 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $20 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Sheridan has 3400 pounds of clay mix in beginning inventory and wants to have 4600 pounds in ending inventory. What is the total amount to be budgeted for manufacturing overhead for the month?

Answer 1

$3,685

Step-by-step explanation:

Calculation to determine the total amount to be budgeted for manufacturing overhead for the month

Using this formula

Total budgeted for manufacturing overhead =(Estimated boxes)(Quarter Hour Direct labor)(Per hour cost)*(Overhead applied rate)

Let plug in the formula

Total budgeted for manufacturing overhead =(670) (.25) ($20) (1.1)

Total budgeted for manufacturing overhead =$3,685

Therefore the total amount to be budgeted for manufacturing overhead for the month is $3,685