Question

Schuepfer Inc. bases its manufacturing overheads expense budget on budgeted unit sales. The sales budget shows 1,300 units are planned to be sold in March. The manufacturing overhead expense is $4.20 per unit. The budgeted fixed manufacturing overhead expense is $19,240 per month, which includes depreciation of $3,380 per month. The cash disbursements for manufacturing overhead expenses for March should be: A. $15,860 B. $5,460 C. $24,700 D. $21,320

Answer 1

Answer: D. $21,320

Explanation:

The cash disbursements for manufacturing overhead expenses for March should be :

budgeted fixed manufacturing overhead expense is $19,240 per month less depreciation of $3,380 per month.

= $19,240 - $3,380 = $15,860

The sales budget shows 1,300 units are planned to be sold in March. The manufacturing overhead expense is $4.20 per unit

= 1,300 x $4.20 = $5,460

Therefore $15,860 + $5,460 = $21,320