Question

The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 3,900 direct labor-hours will be required in January. The variable overhead rate is $7 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,230 per month, which includes depreciation of $3,530. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

Answer 1

$67,000

Step-by-step explanation:

Calculation for the cash disbursements for manufacturing overhead

Using this formula

Cash disbursements = Variable + Fixed

Let plug in the formula

Cash disbursements= (3,900*$7) + (43,230 - 3,530)

Cash disbursements= 27,300+ 39,700

Cash disbursements=$67,000

Therefore the cash disbursements for manufacturing overhead will be $67,000