Brockney Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $1.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $113,460 per month, which includes depreciation of $19,760. A other fixed manufacturing overhead costs represent current cash flows. The July direct labor budget indicates that 9,300 direct labor - hours will be required in that month. Required 1. Determine the cash disbursements for manufacturing overhead for July ermine the predetermined overhead rate for July. (Round your answer to 2 decimal places.) ts for manufa overhead

1. $106,720

2. $13.60

Explanation:

1. In order for us to determine cash disbursements for manufacturing overhead, we must exclude all non-cash relating expense. In this scenario we have depreciation expense in the amount of $19,760 that should be deducted first to the fixed manufacturing overhead.

$113,460-$19,760 = $93,700 expenses that requires an outflow of cash.

Then, we can compute the month of July's manufacturing overhead cash disbursement.

Variable overhead (9,300 x $1.40) $13,020

Fixed overhead 93,700

Total Overhead cash disbursement$106,720

2. Overhead rate is equals to

variable overhead + fixed overhead x Direct labor hours

Variable overhead $13,020

Fixed overhead 113,460

total overhead $126,480

Therefore, $126,480/9,300 = $13.60 per direct labor hour