Exercise 518 Bonita Sleep Systems manufactures nylon mesh ha

Exercise 5-18 Bonita Sleep Systems manufactures nylon mesh hammocks for a chain of retail outlets located throughout the southeast. The company plans to manufacture and sell 28,400 hammocks during the fourth quarter. Overhead costs are expected to include: 5.56 Variable indirect materials$ Variable indirect labor Other variable overhead Salaries Insurance Depreciation per hammock $12.20 per hammock $2.03 per hammock $80,100 per quarter $ 6,300 per quarter $46,300 per quarter Prepare Bonita\'s manufacturing overhead budget for the fourth quarter

Solution

Manufacturing overhead Budget for the 4th year is as calculated below:

Bonita Sleep Systems
Manufacturing Overhead
Particulars	Per Hammock	Amount ($)
Manufacturing Overhead
Variable Overhead
Variable indirect material	5.56	157,904
Variable indirect labor	12.20	346,480
Other variable overhead	2.03	57,652
Total variable overhead		562,036
Fixed Overhead
salaries		80,100
Insurance		6,300
Depreciation		46,300
Total fixed overhead		132,700
Total manufacturing overhead		694,736