Question
Campbell Soup Company estimates that 240,000 direct labor hours will be worked during 2018 in the Mixing Department. On this basis, the following budgeted manufacturing
Campbell Soup Company estimates that 240,000 direct labor hours will be worked during 2018 in the Mixing Department. On this basis, the following budgeted manufacturing overhead data are computed:
Variable Overhead Costs |
| Fixed Overhead Costs |
|
Indirect labor | $96,000 | Supervision | $73,200 |
Indirect materials | 72,000 | Depreciation | 62,280 |
Repairs | 21,600 | Insurance | 51,900 |
Utilities | 7,200 | Rent | 20,760 |
| $196,800 |
| $208,140 |
It is estimated that direct labor hours worked each month will range from 5,000 to 20,000 hours. During June, 15,000 direct labor hours were worked and the following overhead costs were incurred (shown in the chart below):
Variable Overhead Costs |
| Fixed Overhead Costs |
|
Indirect labor | $7,500 | Supervision | $6,100 |
Indirect materials | 4,100 | Depreciation | 5,230 |
Repairs | 1,375 | Insurance | 4,325 |
Utilities | 420 | Rent | 1,730 |
| $13,395 |
| $17.385 |
Instructions:
- Prepare a monthly flexible manufacturing overhead budget for the Mixing Department for each increment of 5,000 direct labor hours over the relevant range for the year ending December 31, 2018.
- Prepare a manufacturing overhead budget report for June.
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