The manufacturing overhead budget of Reigle Corporation is based on budgeted direct labor-hours. The February direct labor budget indicates that 5,800 direct labor-hours will be required in that month. The variable overhead rate is $4.60 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $82,360 per month, which includes depreciation of $16,820. All other fixed manufacturing overhead costs represent current cash flows.Required:a. Determine the cash disbursements for manufacturing overhead for February.b. Determine the predetermined overhead rate for February.
What will be an ideal response?
a.
| February | ||
| Budgeted direct labor-hours | 5,800 | |
| Variable manufacturing overhead rate | $ | 4.60 |
| Variable manufacturing overhead | $ | 26,680 |
| Fixed manufacturing overhead | 82,360 | |
| Total manufacturing overhead | 109,040 | |
| Less depreciation | 16,820 | |
| Cash disbursements for manufacturing overhead | $ | 92,220 |
b.
| Total manufacturing overhead (a) | $ | 109,040 |
| Budgeted direct labor-hours (b) | 5,800 | |
| Predetermined overhead rate for the month (a) ÷ (b) | $ | 18.80 |
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