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Homer, Inc. manufactures model airplane kits and projects production at 450, 120, 350, and 650 kits for the next four quarters. Prepare the manufacturing overhead
Homer, Inc. manufactures model airplane kits and projects production at 450, 120, 350, and 650 kits for the next four quarters. Prepare the manufacturing overhead budget.
Prepare the manufacturing overhead budget. (Enter all costs and hours as a decimal to two places, X.XX. Abbreviations used: VOH = variable manufacturing overhead; FOH = fixed manufacturing overhead.) Homer, Inc. More Info Manufacturing Overhead Budget For the Year Ended December 31 First Second Third Fourth Quarter Quarter Quarter Quarter Total Direct materials are two ounces of plastic per kit and the plastic costs $4 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is 940 ounces, and the company desires to end each quarter with 30% of the materials needed for the next quarter's production. Homer desires a balance of 280 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.25 hours of direct labor at an average cost of $22 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $0.40 per kit, and fixed overhead is $160 per quarter. VOH cost per kit Budgeted VOH Budgeted FOH Budgeted manufacturing overhead costs Print Done Direct labor hours Budgeted manufacturing overhead costs Predetermined overhead allocation rateStep by Step Solution
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