Manufacturing Overhead Budget

Manufacturing Overhead Budget - labor is $8,680 (6,200...

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Manufacturing Overhead Budget The manufacturing overhead budget shows the expected manufacturing overhead costs for the budget period . As Illustration 20-10 shows, this budget distinguishes between variable and fixed overhead costs . Hayes Company expects variable costs to fluctuate with production volume on the basis of the following rates per direct labor hour: indirect materials $1.00, indirect labor $1.40, utilities $0.40, and maintenance $0.20. Thus, for the 6,200 direct labor hours to produce 3,100 units, budgeted indirect materials are $6,200 (6,200 × $1), and budgeted indirect
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Unformatted text preview: labor is $8,680 (6,200 $1.40). Hayes also recognizes that some maintenance is fixed. The amounts reported for fixed costs are assumed for our example. The accuracy of budgeted overhead cost estimates can be greatly improved by employing activity-based costing. Illustration 20-10 Manufacturing overhead budget At Hayes Company, overhead is applied to production on the basis of direct labor hours. Thus, as Illustration 20-10 shows, the budgeted annual rate is $8 per hour ($246,400 30,800)....
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This note was uploaded on 11/08/2011 for the course ACCOUNTING ac 202 taught by Professor - during the Fall '11 term at Montgomery.

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Manufacturing Overhead Budget - labor is $8,680 (6,200...

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