Question
Edgington Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $1.70 per direct labor-hour. The company's budgeted fixed manufacturing
Edgington Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $1.70 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $114,400 per month, which includes depreciation of $19,670. All other fixed manufacturing overhead costs represent current cash flows. The November direct labor budget indicates that 8,800 direct labor-hours will be required in that month. Required:
a. Determine the cash disbursement for manufacturing overhead for November.
b. Determine the predetermined overhead rate for November.
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