Question: Preparing an Overhead Budget Patrick Inc. makes industrial solvents. Budgeted direct labor hours for the first three months of the coming year are:
January 13,140
February 12,300
March 15,075
The variable overhead rate is $0.70 per direct labor hour. Fixed overhead is budgeted at $2,750 per month.
Required: Prepare an overhead budget for the months of January, February, and March, as well as the total for the first quarter.