Endpoint Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $1.30 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $98,900 per month, which includes depreciation of $19,780. All other fixed manufacturing overhead costs represent current cash flows. The September direct labor budget indicates that 8,600 direct labor-hours will be required in that month.Required:a. Determine the cash disbursement for manufacturing overhead for September.b. Determine the predetermined overhead rate for September.
What will be an ideal response?
a.
| September | |||
| Budgeted direct labor-hours | 8,600 | ||
| Variable manufacturing overhead rate | $ | 1.30 | |
| Variable manufacturing overhead | $ | 11,180 | |
| Fixed manufacturing overhead | 98,900 | ||
| Total manufacturing overhead | 110,080 | ||
| Less depreciation | 19,780 | ||
| Cash disbursement for manufacturing overhead | $ | 90,300 | |
| Total manufacturing overhead (a) | $ | 110,080 | |
| Budgeted direct labor-hours (b) | 8,600 | ||
| Predetermined overhead rate for the month (a) ÷ (b) | $ | 12.80 |
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