(a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2017, assuming production levels range from 42,700 to 60,100 direct labor hours. Use increments of 5,800 direct labor hours.

(b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget.

Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2017. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Rate per Direct Variable costs Labor Hour Annual Fixed Costs Indirect labor $0.40 Supervision $47,640 Indirect materials 0.54 Depreciation 19,200 Factory utilities 0.30 Insurance 12,240 Factory repairs 0.20 27,720 The master overhead budget was prepared on the expectation that 484,800 direct labor hours will be worked during the year. In June, 40,400 direct labor hours were worked. At that level of activity, actual costs were as shown Variable-per direct labor hour: indirect labor $0.43, indirect materials $0.52, factory utilities $0.33, and factory repairs $0.24 Fixed: same as budgeted