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 1001 Kachine-OUEN 49,60D 42,000 Utilities Supplies Indirect Labour Supervision Total nestacturing overhead coat $ 33,760 14,00 19,340 44,760 22,000 $ 135,240 $ 41,200 18,600 24,800 32,200 22,000 $ 158,000 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 fived 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 US Supplies indirect Labour Maintenance Supervision Total 60 Answer is complete and correct. Variable Fixed Component Component 4,000 0 0.40 0 15,000 22.000 41,000 1.90 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 forme y = a + bx.) (Round variable cost answer to 2 decimal places.) Answer is complete but not entirely correct. 41,000.00 3. During May, the company operated at 85% of machine hour capacity. Actual manufacturing overhead costs incurred during the month were as follows: Utilities Supplies Indirect labour Supervision Total actual satutacturing oreshead coat $ 35,300 17,330 21,730 42,570 22,000 5138,930 Fixed costs had no budget variances. Prepare an overhead performance report for May. Include bath 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 49.600 machine hours during the month standard hours allowed for the month's production totalled 50.600 machine hours. (Indicate the effect of each variance by selecting "F* for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Round "Cost Formula per MH" answers to 2 decimal places.) Answer is not complete. Overhead Coats Cost Formula per MH Actual Cost 52,700 MH Flexible Budget 52,700 MH Spending Variance Variable dvahend costs Utatis Supplies Indirect labour Maintenance DOO 0.60 0.30 040 0.602 31,300 17,330 21.730 27,670 32,10 5,270 8,500 52,010 850 F 12,060 V 13,230 V 24,440 F BODO 1.90 97,930 97,930 527 F Total variable overhead cost Food overhead Maintenance Supervision ICOS 4.000 16.000 22.000 4,000 15.000 22.000 Alle 41,000 41,000 Totaled over cost Total overhead con 138,930 16,30 4. Not available in Connect
