CT10.4 The manufacturing overhead budget for Huang Sunglasses contains the following items. Variable costs Fixed costs Indirect materials HK$220,000 Supervision HK$170,000 Indirect labor 120,000 Inspection costs 10,000 Maintenance expense 100,000 Insurance expense 20,000 Manufacturing supplies 60,000 Depreciation 150,000 Total variable HK$500,000 Total fixed HK$350,000 The budget was based on an estimated 2,000 units being produced. During the past month, 1,500 units were produced, and the following costs incurred. Variable costs Fixed costs Indirect materials HK$225,000 Supervision HK$184,000 Indirect labor 135,000 Inspection costs 12,000 Maintenance expense 82,000 Insurance expense 22,000 Manufacturing supplies 50,000 Depreciation 147,000 Total variable HK$492,000 Total fixed HK$365,000 Instructions a. Determine which items would be controllable by Jun Chen, the production manager. b. How much should have been spent during the month for the manufacture of the 1,500 units? c. Prepare a flexible manufacturing overhead budget report for Mr. Chen. d. Prepare a responsibility report. Include only the costs that would have been controllable by Mr. Chen's. Assume that the supervision cost above includes Mr. Chen's salary of HK$100,000, both at budget and actual. In an attached memo, describe clearly for Mr. Chen the areas in which his performance needs to be improved