Concept explainers
Manufacturing
The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours:
The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $3.25 perdirect labor-hour and its total fixed manufacturing overhead is $48, 000 per quarter. The only noncash item included in fixed manufacturing overhead isdepreciation, which is Si 6,000 per quarter.
Required:
1. Using Schedule 5 as your guide, prepare the company’s manufacturing overhead budget for the upcoming fiscal year.
2. Compute the company’s predetermined overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year. Round offto the nearest whole cent.
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Introduction To Managerial Accounting
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