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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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  1. 21 May, 16:27
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    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
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Home » Business » 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.
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