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Morrish Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 7,100 direct labor-hours will be required in January. The variable overhead rate is $1.80 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $102,950 per month, which includes depreciation of $19,880. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
Credit Sales
Sales made by a business where the customer is allowed to pay at a later date.
Bad Debt Expense
A charge to the income statement for accounts receivable that a company has determined it will not collect.
Adjusting Entry
An entry made in the books of accounts at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.
Credit Sales
Transactions involving the transfer of goods or services to a customer with the agreement that payment will be made at a later date.
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