Exercise 10-10 (Video)

Chubbs Inc.s manufacturing overhead budget for the first quarter of 2020 contained the following data.

Variable Costs				Fixed Costs
Indirect materials		$12,000		Supervisory salaries		$36,700
Indirect labor		10,900		Depreciation		6,700
Utilities		7,700		Property taxes and insurance		7,800
Maintenance		6,000		Maintenance		4,400

Actual variable costs were indirect materials $14,900, indirect labor $9,500, utilities $9,500, and maintenance $5,400. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,600. The actual activity level equaled the budgeted level. All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance.

(b) Prepare a responsibility report for the first quarter.

CHUBBS INC. Manufacturing Overhead Responsibility Report For the Quarter Ended March 31, 2020
						Difference
Controllable Costs		Budget		Actual		Favorable Unfavorable Neither Favorable nor Unfavorable
DepreciationIndirect MaterialsIndirect LaborMaintenanceSupervisory SalariesProperty Taxes and InsuranceUtilities		$		$		$	FavorableUnfavorableNeither Favorable nor Unfavorable
UtilitiesMaintenanceIndirect MaterialsIndirect LaborSupervisory SalariesProperty Taxes and InsuranceDepreciation							FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationIndirect MaterialsIndirect LaborSupervisory SalariesMaintenanceProperty Taxes and InsuranceUtilities							FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationIndirect LaborIndirect MaterialsMaintenanceSupervisory SalariesUtilitiesProperty Taxes and Insurance							FavorableUnfavorableNeither Favorable nor Unfavorable
Indirect LaborMaintenanceSupervisory SalariesUtilitiesIndirect MaterialsProperty Taxes and InsuranceDepreciation							FavorableUnfavorableNeither Favorable nor Unfavorable
		$		$		$	FavorableUnfavorableNeither Favorable nor Unfavorable