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Question - The direct labour budget of Small Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labour-hours:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Budgeted direct labout-hours
7,000
6,800
7,200
7,400
The company's variable manufacturing overhead rate is $2.75 per direct labour-hour, and the company's fixed manufacturing overhead is $39,000 per quarter. The only non-cash item included in the fixed manufacturing overhead is depreciation, which is $17,000 per quarter.
1. Prepare the company's manufacturing overhead budget for the upcoming fiscal year.
2. Compute the company's manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year.
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