E21-11 prepare a manufacturing overhead budget for the year Atlanta Company is p

Question

E21-11  prepare a manufacturing overhead budget for the year Atlanta Company is preparing its manufacturing overhead budget for 2017.  Relevant data consist of the following. Units to be produced (by quarters):  10,000, 12,000, 14,000, 16,000. Direct labor: time is 1.5 hour per unit. Variable overhead costs per direct labor hour:  indirect materials $0.80; indirect labor $1.20; and maintenance $0.50. Fixed overhead costs per quarter:  supervisory salaries $35,000; depreciation $15,000; and maintenance $12,000. Instructions Prepare the manufacturing overhead budget for the year; showing quarterly data. ATLANTA COMPANY Manufacturing Overhead Budget For the Year Ending December 31, 2017 Quarter 1 2 3 4 Year Units to be produced Direct labor hours per unit 1.5 1.5 1.5 1.5 1.5 Total direct labor hours Variable costs      Indirect materials ($0.80/hour)      Indirect labor ($1.20/hour)      Maintenance ($0.50/hour)           Total variable Fixed costs      Supervisory salaries      Depreciation      Maintenance           Total fixed Total manufacturing overhead Manufacturing overhead rate per direct labor hour E21-11  prepare a manufacturing overhead budget for the year Atlanta Company is preparing its manufacturing overhead budget for 2017.  Relevant data consist of the following. Units to be produced (by quarters):  10,000, 12,000, 14,000, 16,000. Direct labor: time is 1.5 hour per unit. Variable overhead costs per direct labor hour:  indirect materials $0.80; indirect labor $1.20; and maintenance $0.50. Fixed overhead costs per quarter:  supervisory salaries $35,000; depreciation $15,000; and maintenance $12,000. Instructions Prepare the manufacturing overhead budget for the year; showing quarterly data. ATLANTA COMPANY Manufacturing Overhead Budget For the Year Ending December 31, 2017 Quarter 1 2 3 4 Year Units to be produced Direct labor hours per unit 1.5 1.5 1.5 1.5 1.5 Total direct labor hours Variable costs      Indirect materials ($0.80/hour)      Indirect labor ($1.20/hour)      Maintenance ($0.50/hour)           Total variable Fixed costs      Supervisory salaries      Depreciation      Maintenance           Total fixed Total manufacturing overhead Manufacturing overhead rate per direct labor hour

Explanation / Answer

ATLANTA COMPANY Manufacturing Overhead Budget For the year Ending December 31, 2017 Quarter 1 2 3 4 Year Units to be Produced 10000 12000 14000 16000 52000 Direct Labor Hours PU 1.5 1.5 1.5 1.5 1.5 Total Direct Labor Hours 15000 18000 21000 24000 78000 Variable Costs: Indirect Material(0.80/hour) 12000 14400 16800 19200 62400 Indirect Labor(1.20/hour) 18000 21600 25200 28800 93600 Maintaninace(0.50/hour) 7500 9000 10500 12000 39000 Total Variable Costs 37500 45000 52500 60000 195000 Fixed Costs: Supervisory Salaries 35000 35000 35000 35000 140000 Depreciation 15000 15000 15000 15000 60000 Maintainance 12000 12000 12000 12000 48000 Total Fixed Costs 62000 62000 62000 62000 248000 Total Manufacturing Overhead 99500 107000 114500 122000 443000 Manufacturing OH Rate Per DLH 6.63 5.94 5.45 5.08 5.68

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