Morrish inc. bases its manufacturing overhead budget on budgeted direct labor-hours. the direct labor budget indicates that 6,100 direct labor-hours will be required in january. the variable overhead rate is $3.00 per direct labor-hour. the company's budgeted fixed manufacturing overhead is $103,090 per month, which includes depreciation of $18,910. all other fixed manufacturing overhead costs represent current cash flows. the january cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be $102480

Explanation:

For computing the cash disbursements for manufacturing overhead, the calculation is shown below:

= Direct labor cost + Fixed manufacturing overhead

where,

direct labor cost = Direct labor hours × per labor rate

                           = 6,100 × $3.00

                           = $18,300

And, in budgeted fixed manufacturing overhead, the depreciation should be deducted as it is a non cash expense.

So,

= Budgeted fixed manufacturing overhead - depreciation

= $103,090 - $18,910

= $84,180

Now apply the above values to the formula.

So, cash disbursements is =  $18,300 +  $84,180 = $102480

Hence, The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be $102480

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