Preparing a monthly overhead performance report. The monthly flexible manufacturing overhead budget for the Assembly Department of the Cornwall Products Company is given below.

During the month of August 19X1 the departmental volume was 10,650 direct labor hours. Actual costs for the month were as follows:

Instructions 1. Complete the monthly departmental overhead performance report (Exhibit 2).
The costs for depreciation and for taxes and insurance are noncontrollable. Compare the budgeted costs for the actual volume attained with the actual costs for the month.
. Which of the costs appear to be well controlled?
3. Which of the costs appear to be out of line?

4. Give some possible explanations for the lack of control over the items that appear to be significantly out of line.

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Variable Cost Element Fixed Cost Direct Labor Hours per Hour Element 9,000 9,500 10,000 10,500 11,000 Indirect Labor $.40 $1,000 $4,600 $4,800 $5,000 $5,200 $5,400 Payroll Taxes .82 160 7,540 7,950 8,360 8,770 9,180 Indirect Materials .08 100 820 860 900 940 980 Power and Water .04 110 470 490 510 530 550 Depreciation 920 920 920 920 920 920 Taxes and Insurance 185 185 185 185 185 185 Repairs .03 50 320 335 350 365 380