Frizell Company is preparing its manufacturing overhead budget for 2011. Relevan
ID: 2352294 • Letter: F
Question
Frizell Company is preparing its manufacturing overhead budget for 2011. Relevant data consist of the following.
· Units to be produced (by quarters): 10,000, 12,000, 14,000, and 16,0
· Direct labor: Time is 1.5 hours per unit
· Variable overhead costs per direct labor hour: Indirect materials $0.70; indirect labor $1.20; and maintenance $0.50
· Fixed overhead costs per quarter: Supervisory salaries $35,000; depreciation $16,000; and maintenance $12,000
Prepare the manufacturing overhead budget for the year, showing quarterly data.
SEE ANSWER SHEET (WAY) BELOW...
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Quarter
1
2
3
4
Year
Variable costs
Indirect materials
Indirect labor
Maintenance
Total variable
Fixed costs
Supervisory salaries
Depreciation
Maintenance
Total fixed
Total manufacturing overhead
Direct labor hours
Manufacturing overhead rate
per direct labor hour
Quarter
1
2
3
4
Year
Variable costs
Indirect materials
Indirect labor
Maintenance
Total variable
Fixed costs
Supervisory salaries
Depreciation
Maintenance
Total fixed
Total manufacturing overhead
Direct labor hours
Manufacturing overhead rate
per direct labor hour
Explanation / Answer
Frizell Company
Manufacturing Overhead Budget
For the year ended 2011
Quarter
YEAR
1
2
3
4
Number of Units to be produced
10,000
12,000
14,000
16,000
52,000
Direct Labour Hours (Units X 1.5)
15,000
18,000
21,000
24,000
78,000
Variable Overheads
Indirect Material (DLH X $0.70)
10,500
12,600
14,700
16,800
54,600
Indirect labor (DLH X $1.20)
18,000
21,600
25,200
28,800
93,600
Maintenance (DLH X $0.50)
7,500
9,000
10,500
12,000
39,000
Total Variable Overheads
36,000
43,200
50,400
57,600
187,200
Fixed Overhead Costs
Supervisory Salaries
35,000
35,000
35,000
35,000
140,000
Depreciation
16,000
16,000
16,000
16,000
64,000
Maintenance
12,000
12,000
12,000
12,000
48,000
Total Fixed Overheads
63,000
63,000
63,000
63,000
252,000
Total Manufacturing Overheads
99,000
106,200
113,400
120,600
439,200
Frizell Company
Manufacturing Overhead Budget
For the year ended 2011
Quarter
YEAR
1
2
3
4
Number of Units to be produced
10,000
12,000
14,000
16,000
52,000
Direct Labour Hours (Units X 1.5)
15,000
18,000
21,000
24,000
78,000
Variable Overheads
Indirect Material (DLH X $0.70)
10,500
12,600
14,700
16,800
54,600
Indirect labor (DLH X $1.20)
18,000
21,600
25,200
28,800
93,600
Maintenance (DLH X $0.50)
7,500
9,000
10,500
12,000
39,000
Total Variable Overheads
36,000
43,200
50,400
57,600
187,200
Fixed Overhead Costs
Supervisory Salaries
35,000
35,000
35,000
35,000
140,000
Depreciation
16,000
16,000
16,000
16,000
64,000
Maintenance
12,000
12,000
12,000
12,000
48,000
Total Fixed Overheads
63,000
63,000
63,000
63,000
252,000
Total Manufacturing Overheads
99,000
106,200
113,400
120,600
439,200
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