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Davol Corporation Is Preparing Its Manufacturing Overhead Budget for the Fourth

question 91

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Davol Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable manufacturing overhead rate is $6.80 per direct labor-hour; the budgeted fixed manufacturing overhead is $72,000 per month, of which $20,000 is factory depreciation.
-If the budgeted direct labor time for November is 5,000 hours,then the total budgeted cash disbursements for November must be:

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Definitions:

Invoice

A document issued by a seller to a buyer, itemizing a transaction and requesting payment for goods or services provided.

Promises To Pay

Agreements or commitments by a debtor to pay a specific amount by a certain date to a creditor.

Direct Write-off Method

A method of accounting for bad debts that involves charging unpaid invoices directly to the expense account when they are determined to be uncollectible.

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable and record them as an expense.

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