E24-4 Prepare flexible budget reports for manufacturing overhead costs, and comment on findings Thome Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows. Indirect labor $1.00 Indirect materials 0.60 Utilities 0.40 Fixed overhead costs per month are supervision $4,000, depreciation, $1,200, and property taxes $800. The company believes it will normally operate in a range of 7,000 - 10,000 direct labor hours per month. Using the information above, assume that in July 20xx, Thome Company incurs the following manufacturing overhead costs. Variable Costs Fixed Costs Indirect labor $ 8,800 Supervision $ 4,000 Indirect materials 5,300 Depreciation 1,200 Utilities 3,200 Property taxes 800 Instructions (a) Prepar a flexible budget performance report, assuming that the company worked 9,000 direct labor hours during the month. (b) Prepare a flexible budget performance report, assuming that the company worked 8,500 direct labor hours during the month. (c ) Comment on your findings. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . (a) THOME COMPANY Manufacturing Overhead Flexible Budget Report For the Month Ended July 31, 20xx Difference Budget at Actual Costs Favorable F 9,000 DLH 9,000 DLH Unfavorable U Direct labor hours (DLH) Variable costs Indirect labor Value Value Value Indirect materials Value Value Value Utilities Value Value Value Total variable costs ? ? ? Fixed costs Supervision Value Value Value Depreciation Value Value Value Property taxes Value Value Value Total fixed costs ? ? ? Total costs ? ? ? (b) THOME COMPANY Manufacturing Overhead Flexible Budget Report For the Month Ended July 31, 20xx Difference Budget at Actual Costs Favorable F 8,500 DLH 8,500 DLH Unfavorable U Direct labor hours (DLH) Variable costs Indirect labor ($1.00) Value Value Value Indirect materials ($0.60) Value Value Value Utilities ($0.40) Value Value Value Total variable costs ($2.00) ? ? ? Fixed costs Supervision Value Value Value Depreciation Value Value Value Property taxes Value Value Value Total fixed costs ? ? ? Total costs ? ? ?