Below is the Rose Companys Manufacturing Overhead Budget for the 1 st quarter of the year: January
Question:
Below is the Rose Company’s Manufacturing Overhead Budget for the 1st quarter of the year:
January | February | March | Quarter | |
Direct Labor Hours | 20,000 | 15,000 | 12,000 | 47,000 |
Variable manufacturing overhead per hour | $3.00 | $3.00 | $3.00 | $3.00 |
Total variable manufacturing overhead | $ 60,000 | $45,000 | $36,000 | $141,000 |
Fixed manufacturing overhead | 50,000 | 50,000 | 50,000 | 150,000 |
Total manufacturing overhead | $110,000 | $95,000 | $86,000 | $291,000 |
Less: Depreciation | 10,000 | 10,000 | 10,000 | 30,000 |
Cash disbursements for manufacturing overhead | $100,000 | $85,000 | $76,000 | $261,000 |
Rose uses direct labor hours as its overhead allocation base. The company’s predetermined overhead rate (including both variable and fixed manufacturing overhead) for the quarter is closest to:
$8.51 per direct labor hour | ||
$5.51 per direct labor hour | ||
$9.19 per direct labor hour | ||
$6.19 per direct labor hour |
Horngrens Accounting
ISBN: 978-0134674681
12th edition
Authors: Tracie L. Miller nobles, Brenda L. Mattison, Ella Mae Matsumura