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    Budgeted Manufacturing Overhead

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    Lewis Production is planning to sell 220 boxes of bricks and produce 200 boxes of bricks during May. Each box of bricks requires 20 pounds of brick mix and a half hour of direct labor. Brick mix costs $5.00 per 100 pounds and employees of the company are paid $12.00 per hour. Manufacturing overhead is applied at a rate of 120% of direct labor costs. Lewis Production has 600 pounds of brick mix in beginning inventory and wants to have 800 pounds of brick mix in ending inventory. What is the total amount to be budgeted for manufacturing overhead of the month?

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    Solution Preview


    Step 1: Calculate the Direct Labor costs
    = Production *Direct labor hour per box ...

    Solution Summary

    This solution describes the two steps which are required to reach the total manufacturing overhead rate. The calculations needed are rather simple in nature and are provided in this response.