1. Buckhorn Corporation bases its predetermined overhead rate on the estimated
machine hours for the upcoming year. Data for the upcoming year appear
below.

Required:

Compute the company’s predetermined overhead rate.

2. Payment Inc. is preparing its cash budget for February. The budgeted beginning
cash balance is $27,000. Budgeted cash receipts total $136,000 and budgeted cash
disbursements total $128,000. The desired ending cash balance is $50,000. The
company can borrow up to $110,000 at any time from a local bank, with interest
not due until the following month.

Required:

Prepare the company’s cash budget for February in good form. Make sure to indicate what
borrowing, if any, would be needed to attain the desired ending cash
balance.