Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevan

Question

Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the following Units to be produced (by quarters): 10,500, 12,400, 14,700, 16,700. Direct labor: Time is 1.5 hours per unit. Variable overhead costs per direct labor hour: Indirect materials $0.80; indirect labor $1.30; and maintenance so.60. Fixed overhead costs per quarter: supervisory salaries $36,820; depreciation $18,270; and maintenance $14,100. Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal places,o.g. 1.25. List variable expenses before fixed expense.) Manufacturing Quarter

Explanation / Answer

Answer:-

ATLANTA Corporation Manufaturing Overhead Budget Quarter Particulars 1st 2nd 3rd 4th Units to be produced 10500 12400 14700 16700 Direct Labor Time per unit 1.5 hours 1.5 hours 1.5 hours 1.5 hours Total Direct Labor hours 10500 units*1.5 hour=15750 12400 hours*1.5 hour=18600 14700 hours*1.5 hour=22050 16700 hours*1.5 hour =25050 Variable overhead costs:- Indirect Material 15750 hours*$.80 per hour = $12600 18600 hours*$.80 per hour = $14880 22050 hours*$.80 per hour = $17640 25050 hours*$.80 per hour = $20040 Indirect Labor 15750 hours*$1.30 per hour = $20475 18600 hours*$1.30 per hour = $24180 22050 hours*$1.30 per hour = $28665 25050 hours*$1.30 per hour = $32565 Maintenance 15750 hours*$.60 per hour = $9450 18600 hours*$.60 per hour = $11160 22050 hours*$.60 per hour = $13230 25050 hours*$.60 per hour = $15030 Total Variable overhead costs $ (a) 42525 50220 59535 67635 Fixed overhead costs:- Supervisory Salaries 36820 36820 36820 36820 Depreciation 18270 18270 18270 18270 Maintenance 14100 14100 14100 14100 Total Fixed overhead costs $ (b) 69190 69190 69190 69190

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