Departmental Income Statement The following information was obtained from the ledger of Woodfield Candies, Inc., at the end of 2016

Flexible Budget Application The cutting department of Liberty Manufacturing Company operated during September 2016 with the following manufacturing overhead cost budget based on 6,000 hours of monthly productive capacity:

Liberty Manufacturing Company Cutting Department Overhead Budget (6,000 Hours) For the Month of September 2016
Variable costs:
Factory supplies				$48,000
Indirect labor				72,000
Utilities (usage charge)				36,000
Patent royalties on secret process				144,000
Total variable overhead					$300,000
Fixed costs:
Supervisory salaries				96,000
Depreciation on factory equipment				140,000
Factory taxes				40,000
Factory insurance				24,000
Utilities (base charge)				32,000
Total fixed overhead					332,000
Total manufacturing overhead					$632,000

The cutting department was operated for 5,520 hours during September and incurred the following manufacturing overhead costs:

Factory supplies				$41,200
Indirect labor				68,000
Utilities (usage factor)				38,100
Utilities (base factor)				32,000
Patent royalties				134,800
Supervisory salaries				96,000
Depreciation on factory equipment				140,000
Factory taxes				44,200
Factory insurance				27,000
Total manufacturing overhead incurred				$621,300

Using a flexible budgeting approach, prepare a performance report for the cutting department for September 2016, comparing actual overhead costs with budgeted overhead costs for 5,520 hours. Separate overhead costs into variable and fixed components and show the amounts of any variances between actual and budgeted amounts.

Do not use negative signs with your answers below. Do not round until your final answer. Round answers to nearest whole number, if applicable. Select either U for Unfavorable or F for Favorable using the drop down box next to each of your variance answers.

Liberty Manufacturing Company Polishing Department Performance Report - Manufacturing Overhead For the Month Ended September 30,2016
			Actual Costs	Budget (5,520 hours)	Variances
Variable costs:
Factory supplies			Answer	Answer	Answer	AnswerFU
Indirect labor			Answer	Answer	Answer	AnswerFU
Utilities			Answer	Answer	Answer	AnswerFU
Patent royalties			Answer	Answer	Answer	AnswerFU
Total variable overhead			Answer	Answer	Answer	AnswerFU
Fixed costs:
Supervisory salaries			Answer	Answer	Answer	AnswerFU
Depreciation on equipment			Answer	Answer	Answer
Factory taxes			Answer	Answer	Answer	AnswerFU
Factory insurance			Answer	Answer	Answer
Utilities			Answer	Answer	Answer	AnswerFU
Total fixed overhead			Answer	Answer	Answer	AnswerFU
Total overhead costs			Answer	Answer	Answer	AnswerFU

Woodfield analyzes its operating expenses at the end of each period in order to prepare an income statement that will exhibit departmental contribution to common expenses. From payroll records, advertising copy, and other records, the following tabulation was obtained:

				Traceable Expense
				Dept. X	Dept. Y	Common Expense
Sales salaries expense				$150,000	$48,000
Advertising expense				21,000	9,000	$21,000
Insurance expense				15,000	9,000
Uncollectible accounts expense				6,000	3,000
Occupancy expense						36,000
Office and other administrative expense				15,000	12,000	63,000

Prepare a departmental income statement for Woodfield Candies, Inc., showing departmental contribution to common expenses, assuming an overall income tax rate of 35%.

Do not use negative signs with your answers below.

Woodfield Candies, Inc. Departmental Income Statement For the Year Ended December 31, 2016
				Dept. X	Dept. Y	Total
Sales				Answer	Answer	Answer
Cost of goods sold				Answer	Answer	Answer
Gross profit				Answer	Answer	Answer
Operating expenses:
Sales salaries expense				Answer	Answer	Answer
Advertising expense				Answer	Answer	Answer
Insurance expense				Answer	Answer	Answer
Uncollectible accounts expense				Answer	Answer	Answer
Office and other administrative expense				Answer	Answer	Answer
Traceable operating expenses				Answer	Answer	Answer
Contribution to common expenses				Answer	Answer	Answer
Common expenses						Answer
Income before tax						Answer
Income tax expense						Answer
Net income						Answer

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