Activity #5 - Manufacturing Overhead and Operating Expenses Budget Continue with the information from Activity #4. Assume that variable manufacturing overhead is $2.50 per direct labor hour and the company's fixed manufacturing overhead is expected to be $80,000 per month (no depreciation). The company's variable operating expenses are expected to be $3 per unit produced and fixed monthly operating expenses include $5,000 for salaries, $3,000 for rent and $2,500 for depreciation. Required: a. Prepare the manufacturing overhead budget for the first quarter of 2015 (January - March) with a column for each month and for the quarter. Then fill in the Cash Disbursements Budget in Activity #6. MANUFACTURING OVERHEAD BUDGET January February March Total DLH Needed VMOH per DLH Total VMOH Fixed MOH Total MOH Quarter 1 89,100 $ 2.50 $ 222,750 $ 240,000 $ 462,750 b. Prepare the operating expenses budget for the first quarter of 2015 (January - March) with a column for each month and for the quarter. Then fill in the Cash Disbursements Budget in Activity #6. OPERATING EXPENSES BUDGET January February March Quarter 1 Total Units 59,400 Op. Exp per Unit Produced $ 3.00 Total Variable Operating Exp. $ 178,200 Salaries $ 15,000 Rent $ 9,000 Depreciation s 7,500 Total Operating Expenses $ 209,700 March NOTE: FOR CASH BUDGET, POINT OUT THE FOLLOWING January February Total Operating Expenses LESS: Depreciation Total CASH Operating Exp. Quarter 1 $ 209,700 S 7.500 $ 202,200