Exercise 21-10 Atlanta Company is preparing its manufacturing overhead budget fo
ID: 2432365 • Letter: E
Question
Exercise 21-10 Atlanta Company is preparing its manufacturing overhead budget for 2014, Relevant data consist of the following Units to be produced (by quarters): 10,400, 12,200, 14,300, 16,900. Direct labor: time is 1.8 hours per unit. Varlable overhead costs per direct labor hour: indirect materials $0.80; indirect labor $1.30; and maintenance $0.60 Fixed overhead costs per quarter: supervisory salaries $36,200; depreciation $18,110; and maintenance $14,410. Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal places, e.g. 1.25. List variable expenses before fixed expense.) AILANIA COMPANY Manufacturing Overhead Budget For the Year Ending December 31, 2014 rter Direct labor hours Manufacturing overhead rate per direct labor hourExplanation / Answer
ATLANTA COMPANY
Manufacturing Overhead Budget
For the year ended December 31 2014
Quarter
1
2
3
4
Year
Variable Manufacturing Overheads
Indirect Material
$ 14,976.00
$ 17,568.00
$ 20,592.00
$ 24,336.00
$ 77,472.00
Indirect Labor
$ 24,336.00
$ 28,548.00
$ 33,462.00
$ 39,546.00
$ 125,892.00
Variable Maintenance Cost
$ 11,232.00
$ 13,176.00
$ 15,444.00
$ 18,252.00
$ 58,104.00
Total Variable Overhead Cost
$ 50,544.00
$ 59,292.00
$ 69,498.00
$ 82,134.00
$ 261,468.00
Fixed Manufacturing Overheads
Supervisor Salary
$ 36,200.00
$ 36,200.00
$ 36,200.00
$ 36,200.00
$ 144,800.00
Depreciation
$ 18,110.00
$ 18,110.00
$ 18,110.00
$ 18,110.00
$ 72,440.00
Fixed Maintenance Cost
$ 14,410.00
$ 14,410.00
$ 14,410.00
$ 14,410.00
$ 57,640.00
Total Fixed Manufacturing Overheads
$ 68,720.00
$ 68,720.00
$ 68,720.00
$ 68,720.00
$ 274,880.00
Total Manufacturing Overheads
$ 119,264.00
$ 128,012.00
$ 138,218.00
$ 150,854.00
$ 536,348.00
Direct labor Hours
$ 18,720.00
$ 21,960.00
$ 25,740.00
$ 30,420.00
$ 96,840.00
Manufacturing Overhead rate Per Direct Labor Hour
5.54
Working note- Total Direct labor Hours
Quarter
1
2
3
4
Year
Units
10400
12200
14300
16900
53800
Direct labor Per Unit
1.8
1.8
1.8
1.8
1.8
Total Direct Labor Hours
18720
21960
25740
30420
96840
Variable cost is calculated by multiplying Direct labor hour with variable cost per direct labor hour.
ATLANTA COMPANY
Manufacturing Overhead Budget
For the year ended December 31 2014
Quarter
1
2
3
4
Year
Variable Manufacturing Overheads
Indirect Material
$ 14,976.00
$ 17,568.00
$ 20,592.00
$ 24,336.00
$ 77,472.00
Indirect Labor
$ 24,336.00
$ 28,548.00
$ 33,462.00
$ 39,546.00
$ 125,892.00
Variable Maintenance Cost
$ 11,232.00
$ 13,176.00
$ 15,444.00
$ 18,252.00
$ 58,104.00
Total Variable Overhead Cost
$ 50,544.00
$ 59,292.00
$ 69,498.00
$ 82,134.00
$ 261,468.00
Fixed Manufacturing Overheads
Supervisor Salary
$ 36,200.00
$ 36,200.00
$ 36,200.00
$ 36,200.00
$ 144,800.00
Depreciation
$ 18,110.00
$ 18,110.00
$ 18,110.00
$ 18,110.00
$ 72,440.00
Fixed Maintenance Cost
$ 14,410.00
$ 14,410.00
$ 14,410.00
$ 14,410.00
$ 57,640.00
Total Fixed Manufacturing Overheads
$ 68,720.00
$ 68,720.00
$ 68,720.00
$ 68,720.00
$ 274,880.00
Total Manufacturing Overheads
$ 119,264.00
$ 128,012.00
$ 138,218.00
$ 150,854.00
$ 536,348.00
Direct labor Hours
$ 18,720.00
$ 21,960.00
$ 25,740.00
$ 30,420.00
$ 96,840.00
Manufacturing Overhead rate Per Direct Labor Hour
5.54
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