A company bases its manufacturing overhead budget on budgeted direct labor hours. The variable overhead rate is $9.50 per direct labor hour. The company's budgeted fixed manufacturing overhead is $120,500 per month, which includes depreciation of $10,200. The January direct labor budget indicates that 7,200 direct labor hours will be required in that month. a. Determine the cash disbursements for manufacturing overhead for January. b. The company determines its predetermined overhead rate at the end of the month. Determine the predetermined overhead rate for January, rounded to the nearest penny.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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A company bases its manufacturing overhead budget on budgeted direct labor hours. The variable overhead rate is $9.50 per direct labor hour. The company's
budgeted fixed manufacturing overhead is $120,500 per month, which includes depreciation of $10,200. The January direct labor budget indicates that
7,200 direct labor hours will be required in that month.
a. Determine the cash disbursements for manufacturing overhead for January.
b. The company determines its predetermined overhead rate at the end of the month. Determine the predetermined overhead rate for January, rounded to the
nearest penny.
Transcribed Image Text:A company bases its manufacturing overhead budget on budgeted direct labor hours. The variable overhead rate is $9.50 per direct labor hour. The company's budgeted fixed manufacturing overhead is $120,500 per month, which includes depreciation of $10,200. The January direct labor budget indicates that 7,200 direct labor hours will be required in that month. a. Determine the cash disbursements for manufacturing overhead for January. b. The company determines its predetermined overhead rate at the end of the month. Determine the predetermined overhead rate for January, rounded to the nearest penny.
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