Trini Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 8,100 direct labor-hours will be required in May. The variable overhead rate is $1.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $100,440 per month, which includes depreciation of $8,910. All other fixed manufacturing overhead costs represent current cash flows. The May cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

Question

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The variable overhead for May is $1.40 per direct labor-hour * 8,100 direct labor-hours = $11,340. The total manufacturing overhead for May is $100,440 + $11,340 = $111,780. The cash disbursements for manufacturing overhead on the manufacturing overhead budget should be $111,780 - $8,910 = $102,870.

Trini Inc Bases Its Manufacturing Overhead Budget on Budgeted Direct Labor-Hours