The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,300 direct labor-hours will be required in January. The variable overhead rate is $6 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,070 per month, which includes depreciation of $3,690. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:  $53,180

The Cash disbursements for manufacturing overhead is computed as:

= Variable overhead rate × Direct labor hours + Budgeted fixed manufacturing overhead - Depreciation expense

= $6 per direct labor hours × 2,300 direct labor hours + $43,070 - $3,690

= $13,800 + $39,380

= $53,180

Therefore, $53,180 would be the January cash disbursements for manufacturing overhead on the manufacturing overhead budget.

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$53,180

Explanation:

The computation of the cash disbursements for manufacturing overhead is shown below:

= Variable overhead rate × direct labor hours + budgeted fixed manufacturing overhead - depreciation expense

= $6 per direct labor hours × 2,300 direct labor hours + $43,070 - $3,690

= $13,800 + $39,380

= $53,180

We simply applied the above formula so that the cash disbursement could arrive

Since the depreciation expense is a non cash expense so it would be deducted