Question

The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours:

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Budgeted direct labor-hours	10,800	9,600	9,900	10,700

The company’s variable manufacturing overhead rate is $5.50 per direct labor-hour and the company’s fixed manufacturing overhead is $76,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $19,000 per quarter.

Required:
1.	Complete the company’s manufacturing overhead budget for the upcoming fiscal year.

      

2.	Compute the company's manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year.

     

Answer 1

1.

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Budgeted direct labor hours	10800	9600	9900	10700	41000
Variable manufacturing overhead rate	5.50	5.50	5.50	5.50	5.50
Variable manufacturing overhead	59400	52800	54450	58850	225500
Fixed manufacturing overhead	76000	76000	76000	76000	304000
Total manufacturing overhead	135400	128800	130450	134850	529500
Deduct depreciation	19000	19000	19000	19000	19000
Manufacturing overhead	116400	109800	111450	115850	453500

2.

Total budgeted manufacturing overhead for the year	529500
Budgeted direct labor-hours for the year	41000
Manufacturing overhead rate	12.91