Bumblebee Company estimates that 300,000 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		$ 96,000		Indirect labor		$126,000
Depreciation		72,000		Indirect materials		90,000
Insurance		30,000		Repairs		69,000
Rent		24,000		Utilities		72,000
Property taxes		18,000		Lubricants		18,000
		$240,000				$375,000

It is estimated that direct labor hours worked each month will range from 27,000 to 36,000 hours. During October, 27,000 direct labor hours were worked and the following overhead costs were incurred. Fixed overhead costs: supervision $8,000, depreciation $6,000, insurance $2,460, rent $2,000, and property taxes $1,500. Variable overhead costs: indirect labor $12,432, indirect materials $7,680, repairs $6,100, utilities $6,840, and lubricants $1,920.

BUMBLEBEE COMPANY Packaging Department Manufacturing Overhead Flexible Budget Report For the Month Ended October 31, 2017
						Difference
		Budget		Actual Costs		Favorable F Unfavorable U
Direct labor hours (DLH)		27,000 DLH		27,000 DLH
Variable costs
Indirect labor		$11,340		$12,432		$1,092	U
Indirect materials		8,100		7,680		420	F
Repairs		6,210		6,100		110	F
Utilities		6,480		6,840		360	U
Lubricants		1,620		1,920		300	U
Total variable costs		33,750		34,972		1,222	U
Fixed costs
Supervision		8,000		8,000		0
Depreciation		6,000		6,000		0
Insurance		2,500		2,460		40	F
Rent		2,000		2,000		0
Property taxes		1,500		1,500		0
Total fixed costs		20,000		19,960		40	F
Total costs		$53,750		$54,932		$1,182	U

Comment on managements efficiency in controlling manufacturing overhead costs in October.