Asked by Katlyn Holder on May 03, 2024
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Brockney Inc.bases its manufacturing overhead budget on budgeted direct labor-hours.The variable overhead rate is $8.60 per direct labor-hour.The company's budgeted fixed manufacturing overhead is $107,970 per month, which includes depreciation of $9,760.All other fixed manufacturing overhead costs represent current cash flows.The July direct labor budget indicates that 6,100 direct labor-hours will be required in that month.
Required:
a.Determine the cash disbursements for manufacturing overhead for July.
b.Determine the predetermined overhead rate for July.
Manufacturing Overhead Budget
A detailed plan that estimates the expected manufacturing overhead costs for a specific period, assisting in financial planning.
Variable Overhead Rate
The rate at which variable overhead costs are applied to the production process, typically based on a cost driver.
Fixed Manufacturing Overhead
Regular, consistent expenses involved in the operation of a factory that production levels do not affect, such as rent, property taxes, and salaries.
- Examine the components and development of a direct labor budget.
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Learning Objectives
- Examine the components and development of a direct labor budget.
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