Consider the following information from Grantham Company, then see the instructions that
follow.
Grantham Company manufactures dog whistles. The following information is available from
the budgetary control system for 2016, and was used to create the master budget. Grantham
applies overhead using an activity index of direct labor hours.
	Variable Costs				Rate per direct labor hour
	Indirect labor				$0.52
	Indirect materials				0.36
	Factory utilities				0.88
	Factory repairs				0.48
	Fixed Costs				Amount per year
	Depreciation				$25,300
	Insurance				9,300
	Property taxes				5,800
	Supervision				61,500
The master overhead budget was prepared with the expectation that 462,000 direct labor
hours would be worked during the year. In August, 39,500 direct labor hours were worked.
At that level of activity, actual costs were as shown below:
	Variable Costs
	Indirect labor				$0.54	per labor hour
	Indirect materials				0.34	per labor hour
	Factory utilities				0.91	per labor hour
	Factory repairs				0.53	per labor hour
	Fixed Costs
	Depreciation				$2,108
	Insurance				825
	Property taxes				500
	Supervision				5,250
Instructions:
Prepare a monthly manufacturing overhead flexible budget, assuming production levels
ranging from 30,000 to 45,000 direct labor hours, in increments of 5,000.
Prepare a budget report for August comparing actual results to the flexible budget. Explain
whether costs were successfully controlled and how you can tell.
THIS ASSIGNMENT MUST BE COMPLETED IN EXCEL. You should develop an efficient and
customizable production cost report, using formulas whenever possible instead of keyed in
values. No numeric values except the ones shown above should need to be keyed in.