The manufacturing overhead budget of Paparella Corporation is based
on budgeted direct labor-hours. The November direct labor budget
indicates that 6,000 direct labor-hours will be required in that month.
The variable overhead rate is $2.00 per direct labor-hour. The company’s
budgeted fixed manufacturing overhead is $79,200 per month, which
includes depreciation of $21,000. All other fixed manufacturing overhead
costs represent current cash flows.
A. Determine the cash disbursements for manufacturing overhead for November.
B. Determine the predetermined overhead rate for November.