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26 January, 02:02

Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the following. Units to be produced (by quarters) : 10,400, 12,100, 14,200, 17,000. Direct labor: Time is 1.5 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.70; indirect labor $1.30; and maintenance $0.70. Fixed overhead costs per quarter: supervisory salaries $36,850; depreciation $17,390; and maintenance $14,220. Prepare the manufacturing overhead budget for the year, showing quarterly data.

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  1. 26 January, 02:12
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    Overhead Q1 Q2 Q3 Q4

    Total $110,580 $117,465 $125,970 $83,070

    Explanation:

    Manufacturing overheads include all of Indirect Manufacturing costs (Variable and Fixed).

    Calculation of manufacturing overhead budget for the year

    Overhead Q1 Q2 Q3 Q4

    Total Hours Budgeted 15,600 18,150 21,300 25,500

    Variable Overheads:

    Indirect Materials $10,920 $12,705 $14,910 $17,850

    Indirect Labor $20,280 $23,595 $27,690 $33,150

    Maintenance $10,920 $12,705 $14,910 $17,850

    Fixed Overheads:

    Supervisory salaries $36,850 $36,850 $36,850 $36,850

    Depreciation $17,390 $17,390 $17,390 $17,390

    Maintenance $14,220 $14,220 $14,220 $14,220

    Total $110,580 $117,465 $125,970 $83,070
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