Exercise 21-11 Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the following. Units to be produced (by quarters) : 10,400, 12,400, 14,200, 16,600. Direct labor: Time is 1.7 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.80; indirect labor $1.30; and maintenance $0.70. Fixed overhead costs per quarter: supervisory salaries $36,580; depreciation $17,620; and maintenance $13,700. Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal places, e. g. 1.25. List variable expenses before fixed expense.)

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Business

Ella Foley

21 May, 14:29

Exercise 21-11 Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the following. Units to be produced (by quarters) : 10,400, 12,400, 14,200, 16,600. Direct labor: Time is 1.7 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.80; indirect labor $1.30; and maintenance $0.70. Fixed overhead costs per quarter: supervisory salaries $36,580; depreciation $17,620; and maintenance $13,700. Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal places, e. g. 1.25. List variable expenses before fixed expense.)

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Neveah Faulkner · Answer 1

Instructions are listed below

Explanation:

Giving the following information:

Units to be produced (by quarters) : 10,400, 12,400, 14,200, 16,600. Direct labor: Time is 1.7 hours per unit.

Variable overhead costs per direct labor hour:

indirect materials $0.80;

indirect labor $1.30;

maintenance $0.70.

Fixed overhead costs per quarter: supervisory salaries $36,580; depreciation $17,620; and maintenance $13,700.

Manufacturing overhead budget:

First-quarter: (10400 units)

Indirect materials = (0.80*1.7) * 10400 = $14144

Indirect labor = (1.3*1.7) * 10400 = 22984

Maintenance = (0.70*1.7) * 10400 = 12376

Total variable cost = 49504

Fixed costs:

supervisory salaries = $36,580

depreciation = $17,620

maintenance = $13,700.

Total fixed cost = $67900

Total first quarter = $117,404

Second-quarter: (12400 units)

Indirect materials = (0.80*1.7) * 12400 = $16864

Indirect labor = (1.3*1.7) * 12400 = 27404

Maintenance = (0.70*1.7) * 12400 = 14756

Total variable cost = 59024

Fixed costs:

Total fixed cost = $67900

Total cost second quarter = 126,924

Third-quarter: (14200 units)

Indirect materials = (0.80*1.7) * 14200 = $19312

Indirect labor = (1.3*1.7) * 14200 = 31382

Maintenance = (0.70*1.7) * 14200 = 16898

Total variable cost = 67592

Fixed costs:

Total fixed cost = $67900

Total cost third quarter = 135492

Fourth quarter: (16600 units)

Indirect materials = (0.80*1.7) * 16600 = $22576

Indirect labor = (1.3*1.7) * 16600 = 36686

Maintenance = (0.70*1.7) * 16600 = 19754

Total variable cost = 79016

Fixed costs:

Total fixed cost = $67900

Total cost fourth quarter = 146916

Total cost of the year = 117,404 + 126,924 + 135,492 + 146,916 = $526,736