Homework-Chapter 8 6. The manufacturing overhead budget at Amrein Corporation is

Question

Homework-Chapter 8 6. The manufacturing overhead budget at Amrein Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 4,900 direct labor-hours will be required in August. The variable overhead rate is $9.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $96,040 per month, which includes depreciation of $7,350. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: A $88,690 B. $134,750 C. $46,060 D. $142,100

Explanation / Answer

The correct choice is B

Explanation : -

August cash disbursement for manufacturing overhead = variable manufacturing overhead + fixed manufacturing overhead - depreciation

August cash disbursement for manufacturing overhead = 4900 x $ 9.40 + $ 96,040 - $ 7350

August cash disbursement for manufacturing overhead = $ 134,750

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