B

umblebee Company estimates that 362,200 direct labor hours will be worked during the coming year, 2017, in the Packaging Department. On this basis, the budgeted manufacturing overhead cost data are computed for the year.

Fixed Overhead Costs				Variable Overhead Costs
Supervision		$93,840		Indirect labor		$159,368
Depreciation		71,520		Indirect materials		94,172
Insurance		24,360		Repairs		50,708
Rent		19,920		Utilities		54,330
Property taxes		15,960		Lubricants		25,354
		$225,600				$383,932

It is estimated that direct labor hours worked each month will range from 28,000 to 38,500 hours. During October, 28,000 direct labor hours were worked and the following overhead costs were incurred. Fixed overhead costs: Supervision $7,820, Depreciation $5,960, Insurance $1,985, Rent $1,660, and Property taxes $1,330. Variable overhead costs: Indirect labor $13,310, Indirect materials, $6,940, Repairs $3,880, Utilities $4,560, and Lubricants $2,360.

(a) Prepare a monthly manufacturing overhead flexible budget for each increment of 3,500 direct labor hours over the relevant range for the year ending December 31, 2017. (List variable costs before fixed costs.)

Bumblebee Company

Packaging Department

Monthly Manufacturing Overhead Flexible Budget For the Year 2017

X	X	X	X	X
	X	X	X	X
	$	$	$	$
	X	X	X	X

(b) Prepare a flexible budget report for October. (List variable costs before fixed costs.)

Bumblebee Company

Packaging Department

Manufacturing Overhead Flexible Budget Report

For the Month Ended October 31, 2017

X	X	Budget	Acutual Cost	Difference Favorable Unfavorable Neither Favorable nor Unfavorable
	x	x	x	x
	$	$	$
	X	X	X	X
	$	$	$