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	11,600	10,000	10,300	11,100

The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $6.50 per direct labor-hour and its total fixed manufacturing overhead is $84,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $21,000 per quarter.

Required:

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

Prepare the company’s manufacturing overhead budget for the upcoming fiscal year. (Round "Variable manufacturing overhead rate" answers to 2 decimal places.)

	Yuvwell Corporation Manufacturing Overhead Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Variable manufacturing overhead rate Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Cash disbursements for manufacturing overhead

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

redetermined overhead rate for the year:

Answer 1

1.

Yuvwell Corporation
Manufacturing overhead budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Total direct labor hours needed	11,600	10,000	10,300	11,100	43,000
Variable manufacturing overhead rate	6.50	6.50	6.50	6.50	6.50
Variable manufacturing overhead (Total direct labor hours needed x Variable manufacturing overhead rate)	75,400.00	65,000.00	66,950.00	72,150.00	279,500
Fixed manufacturing overhead	84,000.00	84,000.00	84,000.00	84,000.00	336,000
Total manufacturing overhead ( Variable manufacturing overhead + fixed manufacturing overhead)	159,400.00	149,000.00	150,950.00	156,150.00	615,500.00
Less: Depreciation expense	(21,000.00)	(21,000.00)	(21,000.00)	(21,000.00)	(84,000.00)
Cash disbursement for manufacturing overhead (Total estimated manufacturing overhead-Depreciation expense)	138,400.00	128,000.00	129,950.00	135,150.00	531,500.00

2.

Total manufacturing overhead = $615,500

Direct labor hours= 43,000

Predetermined overhead rate = Total manufacturing overhead / Direct labor hours

= 615,500/ 43,000

= $14.31 per direct labor hour

Predetermined overhead rate for the year = $14.31 per direct labor hour

Kindly comment if you need further assistance. Thanks