Hahn May 21, 2022

# Atlanta Company is preparing its manufacturing overhead budget for 2020. Relevant data consist of the following. Units to be produced (by quarters): 10,700, 12,400, 14,700, 16,300. Direct labor: Time is 1.6 hours per unit. Variable overhead costs per direct labor hour: indirect materials \$0.90; indirect labor \$1.30; and maintenance \$0.70. Fixed overhead costs per quarter: supervisory salaries \$37,280; depreciation \$18,330; and maintenance \$13,020.Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal places, e.g. 1.25. List variable expenses before fixed expense.) ATLANTA COMPANY Manufacturing Overhead Budget Quarter 1 2 3 4 \$ \$ \$ \$ \$ > > + + \$ \$ Direct labor hours Manufacturing overhead rate per direct labor hour

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The preparation of the manufacturing overhead budget for the year, showing quarterly data, for Atlanta Company is as follows:

ATLANTA COMPANY

Quarter                                                 1                 2              3               4

Production units                             10,700       12,400       14,700       16,300

Indirect materials \$0.90               \$9,630      \$11,160     \$13,230     \$14,670

Indirect labor \$1.30                        13,910        16,120         19,110        21,190

Maintenance \$0.70                        7,490        8,680       10,290         11,410

Total variable overhead costs \$31,030   \$35,960    \$42,630     \$47,270

Supervisory salaries                  \$37,280    \$37,280     \$37,280    \$37,280

Depreciation                                 18,330       18,330        18,330        18,330

Maintenance                                13,020       13,020        13,020        13,020

Total fixed overhead costs    \$68,630    \$68,630    \$68,630    \$68,630

Total overhead costs             \$99,660  \$104,590    \$111,260    \$115,900

Direct labor hours (1.6)              17,120        19,840       23,520        26,080

per direct labor hour               \$5.82         \$5.27           \$4.73          \$4.44

### What is the manufacturing overhead budget?

The manufacturing overhead budget is a budget for all manufacturing costs except direct materials and direct labor.

The manufacturing overhead budget will show the total variable and fixed overhead costs with details.