Atlanta Company is preparing its manufacturing overhead budget for 2014. Relevan
ID: 2390646 • Letter: A
Question
Atlanta Company is preparing its manufacturing overhead budget for 2014. Relevant data consist of the following.
Units to be produced (by quarters): 10,400, 12,900, 14,500, 16,100.
Direct labor: time is 1.6 hours per unit.
Variable overhead costs per direct labor hour: indirect materials $0.70; indirect labor $1.20; and maintenance $0.70
Fixed overhead costs per quarter: supervisory salaries $36,110; depreciation $17,010; and maintenance $14,100.
Prepare the manufacturing overhead budget for the year, showing quarterly data.
Units to be produced (by quarters): 10,400, 12,900, 14,500, 16,100.
Direct labor: time is 1.6 hours per unit.
Variable overhead costs per direct labor hour: indirect materials $0.70; indirect labor $1.20; and maintenance $0.70
Fixed overhead costs per quarter: supervisory salaries $36,110; depreciation $17,010; and maintenance $14,100.
Explanation / Answer
ATLANTA COMPANY Manufacturing Overhead Budget For the Year Ending December 31, 2014 Quarter 1 2 3 4 Year Variable Costs Indirect Materials (Units produced*Direct Labor hrs*Indirect materials Cost 11648 14448 16240 18032 60368 Indirect Labor Units produced*Direct Labor hrs*indirect labor 19968 24768 27840 30912 103488 Maintenance Units produced*Direct Labor hrs*Maintenance 11648 14448 16240 18032 60368 Total Variable 43264 53664 60320 66976 224224 Fixed Costs Supervisory Salaries 36,110 36,110 36,110 36,110 144440 Depreciation 17,010 17,010 17,010 17,010 68040 Maintenance 14,100 14,100 14,100 14,100 56400 Total Fixed 67,220 67,220 67,220 67,220 268,880 Total Manufacturing Overhead 110,484 120,884 127,540 134,196 493,104 Direct labor hours Units produced*Direct Labor hrs 16640 20640 23200 25760 86240 Manufacturing overhead rate per direct labor hour 5.72
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