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At Jamal's Juices, each smoothie requires 16 oz of juice, which costs $0.15/oz. It takes 0.10 hrs of direct labor to make smoothies, at $9.35 per DLH. Variable overhead costs $1.15/smoothie, and fixed costs total $98,000 per year. They expect to produce 72,000 smoothies next year. Calculate the manufacturing overhead budget for next yea

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Answer:

direct materials = 16 oz x $0.15 per oz = $2.40

direct labor = $9.35 x 0.10 hrs = $0.94

variable overhead = $1.15 per smoothie

fixed costs = $98,000

estimated production per year = 72,000

                                Jamal's Juices

                  Manufacturing Overhead Budget

                               For the Year 202x

                                                                  Per unit              Total

Variable manufacturing overhead          $1.15                   $82,800

Fixed manufacturing overhead               $1.3611               $98,000  

Total                                                          $2.5111               $180,800

Generally the budget would be more specific, e.g. which costs are included under variable MOH or fixed MOH, but in this case we only should include the total variable and fixed costs.

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