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1 January, 18:54

Becker Bikes manufactures tricycles. The company expects to sell 520 units in May and 650 units in June. Beginning and ending finished goods for May is expected to be 180 and 145 units, respectively. June's ending finished goods is expected to be 155 units. The company's variable overhead is $11.00 per unit produced and its fixed overhead is $11,500 per month.

Compute Becker's manufacturing overhead budget for May and June. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) May June Budgeted manufacturing overhead

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  1. 1 January, 20:16
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    The budgeted variable overhead for May is $5,335

    The budgeted variable overhead for June is $7,260

    The budgeted fixed overhead for both May and June is $11,500 per month

    Explanation:

    First we have to determine how many tricycles does Becker Bikes expects to manufacture during May and June:

    May:

    beginning inventory May 180

    expected sales May 520

    ending inventory May 145

    Becker is planning to manufacture 485 tricycles ( = 520 + 145 - 180)

    June:

    beginning inventory May 145

    expected sales May 650

    ending inventory May 155

    Becker is planning to manufacture 660 tricycles ( = 650 + 155 - 145)

    The budgeted variable overhead for May = 485 tricycles x $11 per tricycle = $5,335

    The budgeted variable overhead for June = 660 tricycles x $11 per tricycle = $7,260

    The fixed overhead for both May and June is $11,500 per month
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