PREPARING AN OVERHEAD BUDGET Sherwood, Inc. makes pet crates. Budgeted direct labor hours for the first three months of the coming year is:

January 12,060 February 11,720 March 12,580 The variable overhead rate is $2 per direct labor hour; fixed overhead is budgeted at

$1,800 per month.

Required:

Prepare an overhead budget for the months of January, February, and March, as well as the total for the first quarter.

Cornerstone Exercise