Davie Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable factory overhead rate is $6.00 per direct labor-hour; the budgeted fixed factory overhead is $92,000 per month, of which $16,000 is factory depreciation.
-If the budgeted direct labor time for November is 9,000 hours, then the total budgeted cash disbursements for November must be:

Question

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The total budgeted cash disbursements for November must be $130,000. This is because the budgeted variable factory overhead for November is $6.00 per direct labor-hour, and the budgeted direct labor time for November is 9,000 hours. This means that the budgeted variable factory overhead for November is $54,000 (9,000 hours x $6.00 per hour). The budgeted fixed factory overhead for November is $92,000, of which $16,000 is factory depreciation. This means that the budgeted cash disbursements for November are $130,000 ($54,000 + $92,000 - $16,000).

Davie Corporation Is Preparing Its Manufacturing Overhead Budget for the Fourth