The manufacturing overhead budget for Fleming Company contains the following items.

Instructions

(a) Determine which items would be controllable by Fred Bedner, the production manager.

(b) How much should have been spent during the month for the manufacture of the 1,500 units?

(c) Prepare a flexible manufacturing overhead budget report for Mr. Bedner.

(d) Prepare a responsibility report. Include only the costs that would have been controllable by Mr. Bedner. Assume that the supervision cost above includes Mr. Bedner’s salary of $10,000, both at budget and actual. In an attached memo, describe clearly for Mr. Bedner the areas in which his performance needs to be improved.

ETHICS CASE

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Variable costs Indirect materials Indirect labor Maintenance expense Total variable Manufacturing supplies Fixed costs $24,000 Supervision $18,000 12,000 Inspection costs 1,000 10,000 Insurance expense 2,000 6,000 Depreciation 15,000 $52,000 Total fixed $36,000 The budget was based on an estimated 2,000 units being produced. During the past month, 1,500 units were produced, and the following costs incurred. Variable costs Indirect materials Indirect labor Maintenance expense Manufacturing supplies Total variable Fixed costs $24,200 13,500 Supervision $19,300 Inspection costs 1,200 8,200 Insurance expense 2,200 5,100 Depreciation 14,700 $51,000 Total fixed $37,400