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, 12,100, 14,200, 17,000. Direct labor: Time is 1.5 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.70; indirect labor $1.30; and maintenance $0.70. Fixed overhead costs per quarter: supervisory salaries $36,850; depreciation $17,390; and maintenance $14,220. Prepare the manufacturing overhead budget for the year, showing quarterly data.

Answer 1

Overhead Q1 Q2 Q3 Q4

Total $110,580 $117,465 $125,970 $83,070

Step-by-step explanation:

Manufacturing overheads include all of Indirect Manufacturing costs (Variable and Fixed).

Calculation of manufacturing overhead budget for the year

Overhead Q1 Q2 Q3 Q4

Total Hours Budgeted 15,600 18,150 21,300 25,500

Variable Overheads :

Indirect Materials $10,920 $12,705 $14,910 $17,850

Indirect Labor $20,280 $23,595 $27,690 $33,150

Maintenance $10,920 $12,705 $14,910 $17,850

Fixed Overheads :

Supervisory salaries $36,850 $36,850 $36,850 $36,850

Depreciation $17,390 $17,390 $17,390 $17,390

Maintenance $14,220 $14,220 $14,220 $14,220

Total $110,580 $117,465 $125,970 $83,070