Edgington Inc. bases its manufacturing overhead budget on budgeted direct labor-

Question

Edgington Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $1.30 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $91,020 per month, which includes depreciation of $19,810. All other fixed manufacturing overhead costs represent current cash flows. The November direct labor budget indicates that 8,200 direct labor-hours will be required in that month.

Required:

Determine the cash disbursement for manufacturing overhead for November.

b.

Determine the predetermined overhead rate for November. (Round your answer to 2 decimal places.)

a.

Determine the cash disbursement for manufacturing overhead for November.

b.

Determine the predetermined overhead rate for November. (Round your answer to 2 decimal places.)

Explanation / Answer

a) Determine the cash disbursement for manufacturing overhead for November.

b) Determine the predetermined overhead rate for November.

Predetermine overhead rate = 101680/8200 = 12.40 per labour hour

November Budgeted labour hour 8200 Variable manufacturing overhead rate per unit 1.30 Variable manufacturing overhead 10660 Fixed manufacturing overhead 91020 Total manufacturing overhead 101680 Less: Depreciation (19810) Cash disbursement for manufacturing overhead 81870

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