6 The direct labour budget of Small Corporation for the upco

6. The direct labour budget of Small Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labour-hours: First Quarter 6,400 Second Quarter Third Quarter Fourth Quarter 6,800 Budgeted direct labour-hours 6,200 6,600 The company\'s variable manufacturing overhead rate is $2.45 per direct labour-hour, and the company\'s fixed manufacturing overhead is $41,000 per quarter. The only non-cash item included in the fixed manufacturing overhead is depreciation, which is $17,000 per quarter Required: 1. Prepare the company\'s manufacturing overhead budget for the upcoming fiscal year SMALL CORPORATION Manufacturing Overhead Budget First Quarter Second Quarter Third Quarter Fourth Quarter Year Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Less depreciation Cash disbrsements for manufacturing 2. Compute the company\'s manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year (Round your answer to 2 decimal places.) Predetermined overhead rate for the year

Solution

Small Corporation Manufacturing Overhead Budget 1) First Quarter Second Quarter Third Quarter Fourth Quarter Year Variable Manufacturing overhead(Budgeted direct labour hours*variable Mfg overhead rate) 15680 15190 16170 16660 63700 Fixed manufacturing overhead 41000 41000 41000 41000 164000 Total Manufacturing overhead 56680 56190 57170 57660 227700 Less Depreciation -17000 -17000 -17000 -17000 -17000 Cash disbursements for manufacturing overhead 39680 39190 40170 40660 210700 Compute the company\'s manufacturing overhead rate(both variable and fixed) for the upcoming fiscal year 2) Predetermined overhead rate for the year Total Budgeted manufacturing overhead for the year 227700 Budgeted direct labour hours for the year(6400+6200+6600+6800) 26000 Predetermined overhead rate for the year 8.76