Alcore Company estimates that 240,000 direct labour hours will be worked in the assembly department during 2020. Based on that, the following budgeted manufacturing overhead data are calculated:

Fixed Overhead Costs

Supervision $72,000

Depreciation 30,000

Insurance 12,000

Rent 8,000

Property taxes 6,000

Total $128,000

Variable Overhead Costs

Indirect labour $75,000

Indirect materials 48,000

Repairs 36,000

Utilities 26,400

Lubricants 9,600

Total $195,000

It is estimated that the direct labor hours worked each month will range from 18,000 to 24,000 hours. During January, 20,000 direct labor hours were worked and the following overhead costs were incurred.

Fixed Overhead Costs

Supervision $6,000

Depreciation 2,500

Insurance 1,000

Rent 850

Property taxes 500

Total $10,850

Variable Overhead Costs

Indirect labour $6,300

Indirect materials 3,700

Repairs 2,700

Utilities 1,900

Lubricants 830

Total $15,430

(a) Prepare monthly flexible manufacturing overhead budget for each increment of 2,000 direct labor hours over the relevant range for the year ending December 31, 2020.

(b) Prepare manufacturing overhead budget report for January.

(c) Comment on management's efficiency in controlling manufacturing overhead costs in January.