The manufacturing overhead budget of Paparella Corporation is based on budgeted direct labor hours. The November direct labor budget indicates that 6,000 direct labor hours will be required in that month. The variable overhead rate is $2.00 per direct labor hour. The company’s budgeted fixed manufacturing overhead is $79,200 per month, which includes depreciation of $21,000. All other fixed manufacturing overhead costs represent current cash flows.
A. Determine the cash disbursements for manufacturing overhead for November.
B. Determine the predetermined overhead rate for November.
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