Question

# The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details...

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 9,600 9,000 9,300 10,100

The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is \$4.00 per direct labor-hour and its total fixed manufacturing overhead is \$64,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is \$16,000 per quarter.

Required:

1. Prepare the company’s manufacturing overhead budget for the upcoming fiscal year.

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

 Part 1 Manufacturing overhead budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Variable Manufacturing overheads 38400 36000 37200 40400 152000 9600*4 9000*4 9300*4 10100*4 Fixed Manufacturing overheads 64000 64000 64000 64000 256000 Total Manufacturing overheads 102400 100000 101200 104400 408000 38400+64000 36000+64000 37200+64000 40400+64000 152000+256000 Less: Depreciation 16000 16000 16000 16000 64000 Cash Disbursements for Manufacturing overheads 86400 84000 85200 88400 344000 102400-16000 100000-16000 101200-16000 104400-16000 408000-64000
 Part 2 Total Budgeted manufacturing overheads 408000 Budgeted direct labour hours (9600+9000+9300+10100) 38000 Predetrmined overhead rate (408000/38000) 10.73684211

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