The manufacturing overhead budget at Waycaster Corporation is based on budgeted

Question

The manufacturing overhead budget at Waycaster Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 6,000 direct labor-hours will be required in February. The variable overhead rate is $3.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $81,600 per month, which includes depreciation of $18,000. All other fixed manufacturing overhead costs represent current cash flows.

The February cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

$102,000

$84,000

$63,600

$20,400

Explanation / Answer

The February cash disbursements for manufacturing overhead on the manufacturing overhead budget should be=6,000 direct labor-hours*$3.40 per direct labor-hour+budgeted fixed manufacturing overhead is $81,600 per month-depreciation of $18,000=$84,000.

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