Question

Mccoo Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $1.50 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $93,240 per month, which includes depreciation of $19,830. All other fixed manufacturing overhead costs represent current cash flows. The September direct labor budget indicates that 8,400 direct labor-hours will be required in that month.Required:a. Determine the cash disbursement for manufacturing overhead for September. (Omit the "$" sign in your response.) Cash disbursement for manufacturing overhead $ b. Determine the predetermined overhead rate for September. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Predetermined overhead rate $

Answer 1

Answer:

(a). $86,010

(b). $12.6

Explanation:

According to the scenario, computation of the given data are as follow:-

a). Cash Disbursement for Manufacturing Overhead for September = (Direct Labor Hours × Variable Overhead Rate Per Direct Labor - Hour) + (Fixed Manufacturing Overhead - Depreciation)

=(8,400 × $1.5) + ($93,240 - $19,830)

= $12,600 + $73,410

= $86,010

b). Predetermined Overhead Rate for September = (Fixed Manufacturing Overhead ÷ Direct Labor Hour) + Variable Overhead Rate Per Direct Labor Hour

= ($93,240 ÷ 8,400) +$1.5

= $11.1 + $1.5

= $12.6