Manufacturing overhead budget at Maapatra Corporation
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Question
The manufacturing overhead budget at Mahapatra Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 9,000 direct labor-hours will be required in May. The variable overhead rate is $8.90 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $116,100 per month, which includes depreciation of $18,260. All other fixed manufacturing overhead costs represent current cash flows.
The May cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
a. $97,840
b. $80,100
c. $196,200
d. $177,940
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