Davey Corporation Is Preparing Its Manufacturing Overhead Budget for the Fourth

question 112

Multiple Choice

Davey Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable manufacturing overhead rate is $3.00 per direct labor-hour; the budgeted fixed manufacturing overhead is $66,000 per month, of which $10,000 is factory depreciation. If the budgeted direct labor time for November is 9,000 hours, then the total budgeted cash disbursements for manufacturing overhead for November must be:

• A)$56,000
• B)$83,000
• C)$37,000
• D)$93,000

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Definitions:

Purchase Economies

Cost advantages that a business can achieve by buying goods or services in large quantities, leading to lower per-unit costs.

Transportation Economies

The cost savings realized through efficient transportation logistics, including scale of operation, routing, and mode of transport selection.

MRPII

Manufacturing Resource Planning, an integrated method of operational and financial planning for manufacturing companies.