Company C’s variable manufacturing overhead rate is $2.00 per direct labor hour and the company’s fixed manufacturing overhead is $40,250 per quarter. The only non cash expense included in the fixed overhead is depreciation of $12,000 per quarter.
The budgeted direct labor hours for each quarter are as followed:
|
First |
Second |
Third |
Fourth |
|
|
Budgeted direct labor hours |
5,000 |
6,500 |
6,000 |
5,500 |
Required:
a) Construct company’s manufacturing overhead budget for the year.
b) Compute the company’s manufacturing overhead rates (variable, fixed and total) for the year.