Question

The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 3,000 direct labor-hours will be required in January. The variable overhead rate is $5 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,140 per month, which includes depreciation of $3,620. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:_______.

a. $54,520.
b. $58,140.
c. $39,520.
d. $15,000.

Answer 1

Total cash disbursement= $54,520

Step-by-step explanation:

Giving the following information:

The direct labor budget indicates that 3,000 direct labor-hours

The variable overhead rate is $5 per direct labor-hour.

The company's budgeted fixed manufacturing overhead is $43,140 per month, which includes depreciation of $3,620.

The depreciation expense is not a cash disbursement.

Cash disbursement:

Total variable manufacturing overhead= 5*3,000= 15,000

Total fixed manufacturing overhead= 43,140 - 3,620= 39,520

Total cash disbursement= $54,520