Question

The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 9,000 direct labor-hours will be required in February. The variable overhead rate is $9.70 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $102,600 per month, which includes depreciation of $18,190. All other fixed manufacturing overhead costs represent current cash flows. The February cash disbursements for manufacturing overhead on the manufacturing overhead budget should be

Answer 1

Answer:

See below

Explanation:

With regards to the above, the February cash disbursements for manufacturing overhead on the manufacturing overhead budget is computes as

= Variable + Fixed

= (Direct labor hours × Variable overhead rate) + (Budgeted fixed manufacturing overhead - depreciation)

= (9,000 × $9.70) + ($102,600 - $18,190)

= $87,300 + $84,410

= $171,710