Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the following. Units to be produced (by quarters): 10,400, 12,100, 14,200, 17,000. Direct labor: Time is 1.5 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.70; indirect labor $1.30; and maintenance $0.70. Fixed overhead costs per quarter: supervisory salaries $36,850; depreciation $17,390; and maintenance $14,220. Prepare the manufacturing overhead budget for the year, showing quarterly data.

Overhead                              Q1                  Q2                  Q3                    Q4

Total                                $110,580       $117,465         $125,970        $83,070

Explanation:

Manufacturing overheads include all of Indirect Manufacturing costs (Variable and Fixed).

Calculation of manufacturing overhead budget for the year

Overhead                              Q1                  Q2                  Q3                    Q4

Total Hours Budgeted     15,600           18,150            21,300            25,500

Variable Overheads :

Indirect Materials             $10,920        $12,705          $14,910           $17,850

Indirect Labor                 $20,280        $23,595        $27,690           $33,150

Maintenance                   $10,920         $12,705         $14,910            $17,850

Fixed Overheads :

Supervisory salaries       $36,850        $36,850        $36,850         $36,850

Depreciation                   $17,390         $17,390          $17,390           $17,390

Maintenance                   $14,220         $14,220         $14,220           $14,220

Total                                $110,580       $117,465         $125,970        $83,070

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