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Question - The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours:
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Budgeted direct labor-hours
9,000
8,700
8,400
The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $3.25 per direct labor-hour and its total fixed manufacturing overhead is $58,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $14,500 per quarter.
Required -
1. Prepare the company's manufacturing overhead budget for the upcoming fiscal year.
2. Compute the company's predetermined overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year.
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