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Exercise 8-5 (Algo) Manufacturing Overhead Budget [LO8-6] The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning budgeted
Exercise 8-5 (Algo) Manufacturing Overhead Budget [LO8-6]
The direct labor budget of Yuvwell 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-hours | 9,200 | 8,800 | 9,100 | 9,500 |
The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $3.50 per direct labor-hour and its total fixed manufacturing overhead is $60,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $15,000 per quarter.
Required:
- Prepare the companys manufacturing overhead budget for the upcoming fiscal year.
- Compute the companys predetermined overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year.
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