Preparing 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	$	$	$	$