Davol Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable manufacturing overhead rate is $6.80 per direct labour-hour; the budgeted fixed manufacturing overhead is $72,000 per month, of which $20,000 is factory depreciation.
If the budgeted direct labour time for November is 5,000 hours, then the total budgeted cash disbursements for November must be:
a. $54,000 b. $52,000 c. $106,000 d. $86,000.
Please show work and explain.