1. explain an Overhead Budget

Tulum Inc. makes a Mexican chocolate mix. Budgeted direct labor hours for the first 3 months of the coming year are:

January 9,880 February 8,800 March 12,200 The variable overhead rate is $0.50 per direct labor hour. Fixed overhead is budgeted at $3,140 per month.

Required:

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

Tulum Inc.Overhead Budget For the Coming First Quarter Overhead:

January February March Total

Total direct labor hrs

Variable overhead rate $ $ $ $

Total variable overhead $ $ $ $

Add: Fixed overhead

Total overhead $ $ $ $