Brockney Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $1.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $113,460 per month, which includes depreciation of $19,760. A other fixed manufacturing overhead costs represent current cash flows. The July direct labor budget indicates that 9,300 direct labor- hours will be required in that month. Required 1. Determine the cash disbursements for manufacturing overhead for July ermine the predetermined overhead rate for July. (Round your answer to 2 decimal places.) ts for manufa overhead

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ayokenny2001 ayokenny2001 · Answer 1 · 2022-03-03T11:59:24+01:00

1. Cash disbursements for manufacturing overhead for July is $106,720

2. Manufacturing overhead is $13.60

Manufacturing overhead consist of all indirect costs expended in the course of producing goods and services.

1. Cash disbursements for manufacturing overhead for July ermine the predetermined overhead rate for July.

= $113,460 - $19,760

= $93,700 expenses that requires an outflow of cash.

Now, we can compute the month of July’s manufacturing overhead cash disbursement as seen below:

Variable overhead (9,300 x $1.40)

$13,020

Add:

Fixed overhead

93,700

Total Overhead cash disbursement

$106,720

2. Overhead rate

= Variable overhead + fixed overhead x Direct labor hours

= $13,020 + 113,460

= $126,480

Therefore,

= $126,480/9,300

= $13.60 per direct labor hour

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