Question

Edison Corporation's variable manufacturing overhead rate is $5.00 per direct labor-hour. Total budgeted fixed overhead is $25,000 per month. The $25,000 per month includes $7,000 in depreciation expense. Total budgeted direct labor-hours for the month of July is 20,000. Budgeted cash disbursements for manufacturing overhead for July equals ______. Multiple choice question. $125,000 $132,000 $118,000 $100,000

Answer 1

Answer:

$118,000

Explanation:

Calculation for what the Budgeted cash disbursements for manufacturing overhead for July equals

Using this formula

Budgeted cash disbursement for manufacturing overhead for July=Variable overhead+Fixed overhead-Non-cash depreciation expenses

Let plug in the formula

Budgeted cash disbursement for manufacturing overhead for July=(20,000 x 5.00) + 25,000 – 7,000

Budgeted cash disbursement for manufacturing overhead for July=100,000+ 25,000 – 7,000

Budgeted cash disbursement for manufacturing overhead for July=$118,000

Therefore the Budgeted cash disbursements for manufacturing overhead for July equals $118,000