Haylock Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 8,400 direct labor-hours will be required in August. The variable overhead rate is $1.50 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $100,310 per month, which includes depreciation of $9,040. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

$103,870

Explanation:

Given that,

Direct labor budget = 8,400 direct labor-hours

Variable overhead rate = $1.50 per direct labor-hour

Budgeted fixed manufacturing overhead = $100,310 per month

Depreciation = $9,040

The August cash disbursements for manufacturing overhead includes the cash used for fixed cost and for variable cost. Therefore, the cash disbursement is determined by the sum total of cash fixed cost and cash variable overhead.

Cash fixed costs:

= Budgeted fixed manufacturing overhead - Depreciation

= $100,310 - $9,040

= $91,270

Total cash required for overheads:

= Cash fixed costs + Variable cash overheads

= $91,270 + (8,400 direct labor-hours × $1.50 per direct labor-hour)

= $91,270 + $12,600

= $103,870

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