Exercise 8-5 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	8,400	8,400	8,700	8,100

The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $2.50 per direct labor-hour and its total fixed manufacturing overhead is $52,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $13,000 per quarter.

Required:

1. Prepare the companys manufacturing overhead budget for the upcoming fiscal year.

2. Compute the companys predetermined overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year.

Yuvwell Corporation
Manufacturing Overhead Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Variable manufacturing overhead rate
Variable manufacturing overhead
Fixed manufacturing overhead
Total manufacturing overhead
Cash disbursements for manufacturing overhead

REQUIREMENT 2

Predetermined overhead rate for the year