Month April May June Quarter

Budget direct labour hours 453600 464400 583200 1501200

The full absorption cost of the opening finished goods inventory is$4,730 per unit

The variable manufacturingcost of the opening finished goods inventory is$1,930 per unit

Budgeted Manufacturing Overheads

Fixed Cost component per month Variable Cost component per DL hour

Indirect labour $0 $56.70

Power $0 $5.40

Maintenance ?? ??

Supervision $37,800,000 $0

Depreciation $3,375,000 $0

Rates & Utilities $2,789,100 $0

Other $13,500,000 $40.50

Question:

1. Use the information to make manufacturing overhead budget for the quarter ending June (Excel)
2. Do we need to use absorption cost to make manufacturing overhead budget?