The manufacturing overhead budget of Lewison Corporation is based on budgeted di
ID: 2485019 • Letter: T
Question
The manufacturing overhead budget of Lewison Corporation is based on budgeted direct labor-hours The June direct labor budget indicates that 5,800 direct labor-hours will be required in that month The variable overhead rate is $7,70 per direct labor-hour The company's budgeted fixed manufacturing overhead is $111,360 per month which includes depreciation of $17,400 Alt other fixed manufacturing overhead costs represent current cash flows. Determine the cash disbursement for manufacturing overhead for June Show your work! Determine the predetermined overhead rate for June Show your .work!Explanation / Answer
a.
Calculation of Cash Disbursement for Manufacturing overhead for June:
Variable Manufacturing overhead (5800 Hours * $7.70)
$ 44,660
Budgeted Fixed Manufacturing overhead
$ 111,360
Less: Depreciation (Non Cash)
$ (17,400)
Cash Disbursement for Manufacturing overhead for June
$ 138,620
b.
Calculation of Predetermined overhead rate for June:
Variable Manufacturing overhead (5800 Hours * $7.70)
$ 44,660
Add: Budgeted Fixed Manufacturing overhead
$ 111,360
Total Overhead Cost (A)
$ 156,020
Total Budgeted Direct Labor Hours (DLH) (B)
5,800
Predetermined overhead rate for June = (A/B)
$ 26.90
Per DLH
a.
Calculation of Cash Disbursement for Manufacturing overhead for June:
Variable Manufacturing overhead (5800 Hours * $7.70)
$ 44,660
Budgeted Fixed Manufacturing overhead
$ 111,360
Less: Depreciation (Non Cash)
$ (17,400)
Cash Disbursement for Manufacturing overhead for June
$ 138,620
b.
Calculation of Predetermined overhead rate for June:
Variable Manufacturing overhead (5800 Hours * $7.70)
$ 44,660
Add: Budgeted Fixed Manufacturing overhead
$ 111,360
Total Overhead Cost (A)
$ 156,020
Total Budgeted Direct Labor Hours (DLH) (B)
5,800
Predetermined overhead rate for June = (A/B)
$ 26.90
Per DLH
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