Exercise 13-11 Blue Company is preparing its manufacturing overhead budget for 2

Question

Exercise 13-11 Blue Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the following Units to be produced (by quarters): 10,700, 12,500, 14,800, 16,800 Direct labor: Time is 1.5 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.70; indirect labor $1.20; and maintenance $0.70 Fixed overhead costs per quarter: supervisory salaries $36,290; depreciation $18,530; and maintenance $13,420 Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal places, e.g. 1.25. List variable costs before fixed costs.,)

Explanation / Answer

Manufacturing overhead budget For the year ending Decmeber 31,2017 1 2 3 4 Year Variable costs: Indirect materials 7490 8750 10360 11760 38360 Indirect labor 12840 15000 17760 20160 65760 Maintenance 7490 8750 10360 11760 38360 Total variable 27820 32500 38480 43680 142480 Fixed costs: Supervisory salaries 36290 36290 36290 36290 145160 Depreciation 18530 18530 18530 18530 74120 Total fixed 13420 13420 13420 13420 53680 Maintenance 68240 68240 68240 68240 272960 Total manufacturing overhead 96060 100740 106720 111920 415440 Direct labor hours 82200 Manufacturing overhead rate per direct labor hour 5.05

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