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
Variable overhead costs:
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
Fixed overhead costs:
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
Manufacturing overhead rate
per direct labor hour $5.82 $5.27 $4.73 $4.44
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.
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