Reference no: EM132572079

ABC Company began its operations on March 31, 2019. Projected manufacturing overhead costs for the first three months of business are $156,800, $197,200, and $217,600, respectively, for April, May, and June. Depreciation, insurance, and property taxes for the production facility total $28,800 per month and are included in those estimated monthly manufacturing overhead costs as follows: (1) depreciation included is $15,000 per month; (2) insurance expense of $6,000 is included in each month but was paid for the full year on March 31st startup; and (3) $7,800 of estimated property tax expense is included in each month, but no property taxes will actually be paid until November. For the remainder of manufacturing overhead costs, 50% is expected to be paid in the month when the costs are incurred, with the balance to be paid in the following month.

Question 1: The projected cash disbursements for manufacturing overhead in the month of May are:

Group of answer choices

Option 1: $156,000

Option 2: $154,200

Option 3: $177,000

Option 4: $148,200

Option 5: None of the other answers are correct.