Answer :
Answer:
To calculate the total cash disbursement for manufacturing overhead, take the total manufacturing overhead cost less depreciation.
Total manufacturing overhead cost
= Variable costs + Fixed costs
= (direct labor hours x rate per direct labor hour) + Fixed costs
= (3000 x $5) + $43140
= $15000 + $43140
= $58140
Cash disbursement cost
= Total manufacturing overhead cost - depreciation
= $58140 - $3620
= $54520
The January cash disbursement for manufacturing overhead is $54520.
Explanation:
A few key points to remember:
Fixed manufacturing overhead cost is all the costs of production which stay constant such rent, depreciation, etc. In other words components in the manufacturing process which stay constant.
Variable cost is based on the number of direct labor hours and the rate allocated per direct labor hour.
When calculating the cash disbursement, depreciation is taken out as a fixed component from the total manufacturing cost as it is not a cash outlay even though it is a fixed cost. Hence cash disbursement is calculated on the total manufacturing overhead less depreciation.
Answer:
$54 520
Explanation:
Calculations as follows
Direct labor budgeted hours 3000
The variable manufacturing overhead $5 per hour
The total variable manufacturing costs
3000*$5=$15 000
Fixed overhead manufacturing overhead cost given
$43140
but included depreciation and depreciation is a non cash expense so should be deducted as the goal is to calculate cash
43140-$3620=$39520
So the total cash disbursement for manufacturing overhead budget is
$15000+$39520=$54 520