(a) Prepare a monthly manufacturing overhead flexible budget for each increment of 2,100 direct labor hours over the relevant range for the year ending December 31, 2020. (List variable costs before fixed costs.)
(b) Prepare a flexible budget report for October. (List variable costs before fixed costs.)
Marigold Company estimates that 372,900 direct labor hours will be worked during the coming year, 2020, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year. Fixed Overhead Costs Variable Overhead Costs Supervision Depreciation Insurance $85,440 66,240 33,720 29,280 12,480 $227,160 Indirect labor Indirect materials Repairs Utilities Lubricants $164,076 74,580 74,580 93,225 29,832 $436,293 Rent Property taxes It is estimated that direct labor hours worked each month will range from 24,700 to 31,000 hours. During October, 24,700 direct labor hours were worked and the following overhead costs were incurred. Fixed overhead costs: Supervision $7,120, Depreciation $5,520, Insurance $2,785, Rent $2,440, and Property taxes $1,040. Variable overhead costs: Indirect labor $11,888, Indirect materials, $4,570, Repairs $4,870, Utilities $6,475, and Lubricants $2,286. (a) Prepare a monthly manufacturing overhead flexible budget for each increment of 2,100 direct labor hours over the relevant range for the year ending December 31, 2020. (List variable costs before fixed costs.) Variable Costs Direct Labor Hours - 24700 26800 28900 80400 Indirect Labor Indirect Materials - 11888 12899 13909 38696 1 Repairs 4570 4959 5347 14876 Utilities 4870 5284 5698 16852 Lubricants 6475 7026 7576 21077 Total Variable Costs 30089 32648 35205 97942 Fixed Costs T Supervision 7120 21360 7120 5520 220 5520) Depreciation T 5520 5520 5520 16560 * Insurance 2785 2785 2785 8355 T Rent 2440 2440 2440 7320 HOBET JARDUE JARDUE Property Taxes 1040 1040 1040 T 3120 T Total Fixed Costs - 18905 18905 18905 56715 Total Costs 48994 51553 54110 154657 Manufacturing Overhead Flexible Budget Report For the Month Ended October 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs Direct Labor Hours T Variable Costs Indirect Labor Indirect Materials - nitidin Tidite Repairs Utilities Lubricants T Total Variable Costs A Fixed Costs Supervision Depreciation Insurance XIN Rent Property Taxes Total Fixed Costs
