Document Malings Review View W Design Layout References ody - 12 - A A A A U. XX A. AD Aalto ABECEDE A AaBbc Acid 2) The Duranceau company has great difficulty controlling its indirect manufacturing costs. At a recent convention, the President and CEO heard about the flexible budget. He hired you to develop such budgets for his company. After some effort, you were able to develop the following cost formulas for the machine shop. The costs are based on a normal level of activity between 10,000 and 20,000 machine hours per month. Manufacturing overhead Standard cost Utilities.... $0.70 per machine hour Lubricants.. $1.00 per machine hour plus $8,000 per month Machine adjustments. $0.20 per machine hour Indirect labour.. $0.60 per machine hour plus $120,000 per month. Depreciation... 32,000 per month During the month of March, the first month after the preparation of the above data, the machine shop recorded 18,000 machine hours and produced 9,000 units. The actual manufacturing overheads for this month are as follows: Utilities....... $12,000 Lubricants.... $24,500 Machine Set- up 4,800 Indirect labour.... $132,500 Depreciation. 32,000 $ MacBook 20 Du OU 7 %6 * > $ 4 3 6 & 7 8 9 0 - E { R Y T U L 0 a D F G K L Me At ABCDE A AaBb A. Utilities $12,000 Lubricants $24,500 Machine Set- up. 4,800 Indirect labour..... $132,500 Depreciation... 32,000 $ Total manufacturing overhead 205,800 $ There is no variance on fixed expenses. A total of 20,000 machine hours had been planned for the machine shop in March. A) Prepare a performance analysis report for the machine shop overhead for the month of March. Include both fixed and variable costs (in separate sections). Include only the variance on expense in this report B) What additional information would you need if you were calculating an overhead variance for this shop? Macbook BO 00 DO 288 TE 32 M $ 4 ( 9 > 0 + N 3 5 6 7 8 E R Y U 1 I s D F G HJ L ? C V B N M