Electric Company estimates that 360,000 direct labor hours will be worked during 2019 in the Fixing Department. On this basis, the following budgeted manufacturing overhead data are computed. Variable Overhead Costs Indirect labor $72.000 Indirect material 54,000 Repairs 36,000 Utilities 28.800 Lubricants 18.000 Total $208.800 Fixed Overhead Costs (annually) Supervision $75,000 Depreciation 30,000 Insurance 12,000 Rent Property taxes Total $132.000 It is estimated that direct labor hours worked each month will range from 18,000 to 24,000 hours. During January, 20,000 direct labor hours were worked, and the following overhead costs were incurred. Variable Overhead Costs Indirect labor $6,300 Indirect material 2,500 Repairs 2,700 Utilities 1,900 Lubricants 830 Total $14.230 Fixed Overhead Costs Supervision 56,250 Depreciation 2,500 Insurance 1,000 Rent 850 Property taxes 500 SII.100 Total Instructions: 1. Prepare a monthly flexible manufacturing overhead budget for each increment of 2,000 direct labor hours over the relevant range for the year ending December 31, 2019. 2. Prepare a manufacturing overhead budget report for January 3. Comment on management's efficiency in controlling manufacturing overhead costs in January. Problem #2 Lucas Corporation manufactures a single product. The standard cost per unit of product is as follows. Direct materials 2 pounds of plastic at $5 per pound $ 10 Direct labor - 2 hours at $12 per hour 24 Variable manufacturing overhead Fixed manufacturing overhead 6 Total standard cost per unit 48 8 The master manufacturing overhead budget for the month based on normal productive capacity of 20,000 direct labor hours (10,000 units) shows total variable costs of $80,000 (54 per labor hour) and total fixed costs of $60,000 ($3 per labor hour). Normal productive capacity is 20,000 direct labor hours. Overhead is applied on the basis of direct labor hours. Actual costs for November in producing 9,800 units were as follows. Direct material (20,500 pounds) $ 100,450 Direct labor (19,600 hours) 239,120 Variable overhead 78,100 Fixed overhead 59.200 Total manufacturing costs $476,870 The purchasing department normally buys the quantities of raw material that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored. The product were sold for $65 per unit. Selling and administrative expenses were $ 60,500. Assume that the amount of raw material purchased equaled the amount used. Assume income tax rate is 25%. Instructions: 1) Compute all the materials and labor variances. 2) Compute the total overhead variance. 3) Prepare an Income Statement for the month ended January 31, 2019 for Lucas Corporation