Exercise 10-4 a-b (Video) Your answer is partially correct. Try again. Myers 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 $1.20 Indirect materials Utilities 0.80 0.40 Fixed overhead costs per month are Supervision $3,500, Depreciation $1,300, and Property Taxes $700. The company believes it will normally operate in a range of 5,500-8,500 direct labor hours per month. Assume that in July 2020, Myers Company incurs the following manufacturing overhead costs Variable Costs Fixed Costs Indirect labor $8,720 Supervision $3,500 Indirect materials 5,830 Depreciation 1,300 Utilities 2,590 Property taxes 700 MYERS COMPANY Manufacturing Overhead Flexible Budget Report For the Month Ended July 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Actual Costs Budget 7,500 7,500 Direct Labor Hours Variable Costs Favorable 9,000 Indirect Labor 6,000 Indirect Materials x 3,000 Utilities 18,000 Total Variable Costs Fixed Costs Neither Favorable nor Unfavorable 3,500 3,500 Supervision 1,300 1,300 Depreciation Neither Favorable nor Unfavorable 700 Property Taxes 700 Neither Favorable nor Unfavorable 5,500 5,500 Total Fixed Costs Neither Favorable nor Unfavorable 23,500 Total Costs (b) Prepare a flexible budget performance report, assuming that the company worked 6,800 direct labor hours during the month. MYERS COMPANY Manufacturing Overhead Flexible Budget Report For the Month Ended July 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs 6,800 6,800 Direct Labor Hours Variable Costs 8,160 Indirect Labor 5,440 Indirect Materials 2,720 Utilities 16,320 Total Variable Costs Fixed Costs Neither Favorable nor Unfavorable 3,500 3,500 Supervision Neither Favorable nor Unfavorable 1,300 1,300 Depreciation Neither Favorable nor Unfavorable 700 700 Property Taxes Neither Favorable nor Unfavorable 5,500 5,500 Total Fixed Costs 21,820 Total Costs