Question

Actual results for January: The manufacturing overhead in the flexible budget for January would be closest to: g

Answer 1

Question Completion:

The manufacturing overhead in the flexible budget for March would be closest to:

A. $371,650

B. $371,281

C. $373,630

D. $374,300

Where the fixed overhead is $45,700 and the actual direct labor hours is 6,150 instead of 6,300 (at a predetermined overhead rate of $53 per DLH).

Answer:

The manufacturing overhead in the flexible budget for January would be closest to:

A. $371,650

Explanation:

a) Data and Calculations:

Fixed overhead = $45,700

Estimated direct labor hours = 6,300

Actual direct labor hours = 6,150

Predetermined overhead rate = $53 per DLH

In the static budget, the manufacturing overhead will be equal to:

= $45,700 + ($53 x 6,300)

= $379,600

But the flexible budget manufacturing overhead will be based on the actual hours of direct labor, thus:

= $45,700 + ($53 x 6,150)

= $371,650