Asper Company has recently introduced budgeting as an integral part of its corporate planning process. An inexperienced member of the accounting staff was given the assignment of constructing a flexible budget for manufacturing overhead costs and prepared it in the format that follows: Percentage of Capacity Machine-hours 80% 51,200 100% 64,000 $ $ Utilities Supplies Indirect labour Maintenance Supervision 46,960 10, 240 15,360 42,600 24,000 57,200 12,800 19,200 49,000 24,000 Total manufacturing overhead cost $ 139,160 $ 162,200 The company assigns manufacturing overhead costs to production on the basis of standard machine-hours. The cost formulas used to prepare the budgeted figures above are relevant over a range of 80% to 100% of capacity in a month. The managers who will be working under these budgets have control over both fixed and variable manufacturing overhead costs. Required: 1. Use the high-low method to separate fixed and variable costs. (Round variable cost answers to 2 decimal places.) Overhead Item Variable Component 0.441 0.111 Utilities Supplies Indirect labour Maintenance Supervision Totals Fixed Component 25,422 1,422 3,200 13,611 0.17 0.28| 0.00 1.00 $ $ 43,655 2. Come up with a single cost formula for all overhead costs based on your analysis in requirement 1 above. (Hint: Your cost formula should be of the form: y = a + bx.) (Round variable cost answer to 2 decimal places.) Y= 43,656 + 1.00 3. During May, the company operated at 86% of machine-hour capacity. Actual manufacturing overhead costs incurred during the month were as follows: Utilities Supplies Indirect labour Maintenance Supervision $ 48,500 12,690 17,250 40, 410 24,000 Total actual manufacturing overhead cost $142,850 Fixed costs had no budget variances. Prepare an overhead performance report for May. Include both fixed and variable costs in your report (in separate sections). Structure your report so that it shows only a spending variance for variable overhead. The company originally budgeted to work 51,200 machine-hours during the month; standard hours allowed for the month's production totalled 52,200 machine-hours. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round "Cost Formula per MH" answers to 2 decimal places.) Overhead Costs Cost Formula per Actual Cost 55,040 MH Flexible Budget 55,040 MH Spending Variance Variable overhead costs: $ 0.00 Total variable overhead cost Fixed overhead costs: 0 Total fixed overhead cost Total overhead cost 01 0 $ 0 $