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The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,700 direct labor-hours will be required in January. The variable overhead rate is $9 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,110 per month, which includes depreciation of $3,650. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

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Answer:

Total cash disbursement= $63,760

Explanation:

The cash outflows of manufacturing overhead are the sum of total variable overhead and cash fixed overhead.

First, we need to deduct the depreciation expense from the fixed overhead:

Cash only fixed overhead= 43,110 - 3,650= $39,460

Now, the cash disbursement:

Total variable overhead= 2,700*9= 24,300

Total fixed overhead= 39,460

Total cash disbursement= $63,760

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