The manufacturing overhead budget at Cardera Corporation is based on budgeted di

Question

The manufacturing overhead budget at Cardera Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 8,900 direct labor-hours will be required in January. The variable overhead rate is $9.10 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $112,140 per month, which includes depreciation of $18,250. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: $174,880 $193,130 $93,890 $80,990

Explanation / Answer

Direct Labor Hours 8900 Variable Overheads $ 9.10 per direct Labor Hour January Cash Disbursements varaible Overheads 80990 (8900*9.10) Fixed Cash Overheads 93890 (112140-18250) Cash Disbursement 174880 The correct answer is a. $ 174880

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