How much cash will LouAnne need on hand to pay for February's total factory overhead costs?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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LouAnne's Widgets has the following sales and production for the next
quarter:
January
February
March
Sales
4,000 units 7,000 units 9,000 units
Production 4,600 units 7,400 units 9,200 units
Each unit requires 1/2 DLH to manufacture and each DLH is paid $18. Labor
is paid in the month incurred.
FOH is applied based on DLH. Estimated variable FOH for the year is
expected to be $500,000 and estimated DLH for the year are expected to be
100,000. Fixed FOH is estimated to be $51,800 per month with $2,590 of
that amount being depreciation of factory equipment and building. FOH is
paid in the month incurred.
How much cash will LouAnne need on hand to pay for February's total factory
overhead costs?
Transcribed Image Text:LouAnne's Widgets has the following sales and production for the next quarter: January February March Sales 4,000 units 7,000 units 9,000 units Production 4,600 units 7,400 units 9,200 units Each unit requires 1/2 DLH to manufacture and each DLH is paid $18. Labor is paid in the month incurred. FOH is applied based on DLH. Estimated variable FOH for the year is expected to be $500,000 and estimated DLH for the year are expected to be 100,000. Fixed FOH is estimated to be $51,800 per month with $2,590 of that amount being depreciation of factory equipment and building. FOH is paid in the month incurred. How much cash will LouAnne need on hand to pay for February's total factory overhead costs?
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