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Mccoo Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $1.50 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $25,900 per month, which includes depreciation of $6,900 per month. All other fixed manufacturing overhead costs represent current cash flows. Budgeted sales for June are $500,000, July $600,000 and August $700,000, based on an average selling price of $25.00 per unit, with the corresponding production budget showing 20,000 units in June, 24,000 units in July and 28,000 in August. The direct labor budget for the quarter indicates a labor rate of 0.40 per unit. Required: Using the template a. Determine the cash disbursement for manufacturing overhead for the quarter.
b. Determine the predetermined overhead rate for the quarter.
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