The direct labor budget of Kiko Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours. 1st quarter 2nd quarter 3rd quarter 4th quarter Budgeted direct labor hour........... 5,000 4,800 5,200 5,400 The company's variable manufacturing overhead rate is P1.75 per direct labor hour and the company's fixed manufacturing overhead is P35,000 per quarter. The only noncash item included in the fixed manufacturing overhead is depreciation, which is P15,000 per quarter. Required: Compute the company’s manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year. Round off to the nearest whole centavos.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Exercise 5 (Manufacturing
The direct labor budget of Kiko Corporation for the upcoming fiscal year
contains the following details concerning budgeted direct labor-hours.
1st quarter 2nd quarter 3rd quarter 4th quarter
Budgeted direct labor
hour........... 5,000 4,800 5,200 5,400
The company's variable manufacturing overhead rate is P1.75 per direct labor hour and the company's fixed manufacturing overhead is P35,000 per quarter. The only noncash item included in the fixed manufacturing overhead is
Required:
Compute the company’s manufacturing overhead rate (including both
variable and fixed manufacturing overhead) for the upcoming fiscal year.
Round off to the nearest whole centavos.
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