Joshua Hill, Bates & Hill Fabricators’  production manager, has just completed the company’s production budget and direct labor budget for the  first quarter. He has identified the following monthly expenses that will be  needed to support the company’s manufacturing process.

The company applies manufacturing overhead based on direct labor hours, and the current predetermined rates are $12.25 per direct labor hour for fixed manufacturing overhead and $1.75 per direct labor  hour for variable manufacturing overhead.

Required

Prepare Bates & Hill’s manufacturing overhead budget for the first quarter.

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Fixed Variable Overhead Overhead per month per DLH Depreciation Indirect materials $30,000 18,600 $1.20 Indirect labor 22,000 0.20 Utilities 18,000 0.15 Property taxes Maintenance 4,300 6,000 0.20