The manufacturing overhead budget at Rost Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,800 direct labor-hours will be required in September. The variable overhead rate is $7.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,120 per month, which includes depreciation of $3,640. All other fixed manufacturing overhead costs represent current cash flows. The September cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

Question

Kingston Hurley

Business

22 December, 02:05

The manufacturing overhead budget at Rost Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,800 direct labor-hours will be required in September. The variable overhead rate is $7.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,120 per month, which includes depreciation of $3,640. All other fixed manufacturing overhead costs represent current cash flows. The September cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

+2

Answers (1)

Know the Answer?

Nehemiah Wang · Answer 1

Total overhead cash disbursement = $59,080

Explanation:

Giving the following information:

Estimated direct labor hours = 2,800

The variable overhead rate is $7.00 per direct labor-hour.

Estimated fixed manufacturing overhead = $43,120 per month

Includes depreciation of $3,640

To calculate the cash disbursement, we need to deduct from the fixed manufacturing overhead the depreciation expense because it is not a cash disbursement.

Variable overhead = 7*2,800 = 19,600

Fixed overhead = 43,120-3,640 = 39,480

Total overhead cash disbursement = $59,080