The manufacturing overhead budget at Rost Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,800 direct labor-hours will be required in September. The variable overhead rate is $7.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,120 per month, which includes depreciation of $3,640. All other fixed manufacturing overhead costs represent current cash flows. The September cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

Total overhead cash disbursement= $59,080

Explanation:

Giving the following information:

Estimated direct labor hours= 2,800

The variable overhead rate is $7.00 per direct labor-hour.

Estimated fixed manufacturing overhead= $43,120 per month

Includes depreciation of $3,640

To calculate the cash disbursement, we need to deduct from the fixed manufacturing overhead the depreciation expense because it is not a cash disbursement.

Variable overhead= 7*2,800= 19,600

Fixed overhead= 43,120-3,640= 39,480

Total overhead cash disbursement= $59,080

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