The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,400 direct labor-hours will be required in January. The variable overhead rate is $5 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,080 per month, which includes depreciation of $3,680. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

$51,400

Explanation:

In order to calculate the cash disbursements for manufacturing overhead, the calculation is given below:

= Direct labor cost + Fixed manufacturing overhead

where,

Direct labor cost = Direct labor hours × per labor rate

                            = 2,400 direct labor hours × $5

                             = $12,000

And, while computing the budgeted fixed manufacturing overhead, the depreciation should be subtracted as it is a non cash expense.

So,

= Budgeted fixed manufacturing overhead - depreciation expenses

= $43,080 - $3,680

= $39,400

Now applied the above values to the formula.

Therefore, cash disbursements is

=  $12,000 + $39,400

= $51,400

first one

explanation: