The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 8,800 direct labor-hours will be required in February. The variable overhead rate is $9.20 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $109,120 per month, which includes depreciation of $18,240. All other fixed manufacturing overhead costs represent current cash flows.The February cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

Question

Quizplus · Accepted Answer

The cash disbursements for manufacturing overhead include variable overhead and cash-based fixed overhead. Variable overhead is 8,800 hours * $9.20 = $80,960. Fixed overhead cash flows are $109,120 - $18,240 (depreciation) = $90,880. Total cash disbursements = $80,960 + $90,880 = $171,840.

The Manufacturing Overhead Budget at Polich Corporation Is Based on Budgeted