Shuck Inc. bases its manufacturing overhead budget on budgeted direct labor-hour

Question

Shuck Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 8,800 direct labor-hours will be required in May. The variable overhead rate is $1.70 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $100,510 per month, which includes depreciation of $8,840. All other fixed manufacturing overhead costs represent current cash flows. The May cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

$87,910 $80,910 $187,050 $168,820


Please solve before 9pm if possible

Many thanks!

Explanation / Answer

Cash Disbursement= Variable Overhead + Fixed Manufacturing Overhead - Non Cash Expenses

= 1.70*8800 + 100510 - 8840

= $106,630

The May cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: $106,630

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