Question

Edison Corporation's variable manufacturing overhead rate is $5.00 per direct labor-hour. Total budgeted fixed overhead is $25,000 per month. The $25,000 per month includes $7,000 in depreciation expense. Total budgeted direct labor-hours for the month of July is 20,000. Based on the month of July only, the predetermined overhead rate is $. Total budgeted manufacturing overhead for July is: ___.

Answer 1

Answer:

Manufacturing overhead for July will be $55000

Explanation:

We have given budgeted labor hour in month of July = 20000

Variable overhead rate = $5

So variable manufacturing overhead = 20000×$5 = $100000

Fixed manufacturing overhead = $25000

Now total manufacturing overhead = $100000+$25000 = $125000

Depreciation expense = $7000

So manufacturing overhead for July = $125000 - $7000 = $55000