The manufacturing overhead budget at Amrein Corporation is based on budgeted dir

Question

The manufacturing overhead budget at Amrein Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 3,700 direct labor-hours will be required in August. The variable overhead rate is $5 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,210 per month, which includes depreciation of $3,550. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

A) $61,710

B) $58,160

C) $18,500

D) $39,660

The manufacturing overhead budget at Amrein Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 3,700 direct labor-hours will be required in August. The variable overhead rate is $5 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,210 per month, which includes depreciation of $3,550. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

Explanation / Answer

Variable Overhead Cost ($5*3700 hour) 18500 Fixed Overhead Expenses 43210 Total Overhead cost 61710 Less:Depreciation Included 3550 Cash Disbursement for Manufacturing Expenses 58160 Answer: B. $58,160

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