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Flexible Budget Application The cutting department of Liberty Manufacturing Company operated during September 2016 with the following manufacturing overhead cost budget based on 6,000 hours

Flexible Budget Application The cutting department of Liberty Manufacturing Company operated during September 2016 with the following manufacturing overhead cost budget based on 6,000 hours of monthly productive capacity:

Liberty Manufacturing Company Cutting Department Overhead Budget (6,000 Hours) For the Month of September 2016
Variable costs:
Factory supplies $48,000
Indirect labor 72,000
Utilities (usage charge) 36,000
Patent royalties on secret process 144,000
Total variable overhead $300,000
Fixed costs:
Supervisory salaries 96,000
Depreciation on factory equipment 140,000
Factory taxes 40,000
Factory insurance 24,000
Utilities (base charge) 32,000
Total fixed overhead 332,000
Total manufacturing overhead $632,000

The cutting department was operated for 5,580 hours during September and incurred the following manufacturing overhead costs:

Factory supplies $41,400
Indirect labor 68,200
Utilities (usage factor) 38,100
Utilities (base factor) 32,000
Patent royalties 135,000
Supervisory salaries 96,000
Depreciation on factory equipment 140,000
Factory taxes 44,400
Factory insurance 27,000
Total manufacturing overhead incurred $622,100

Using a flexible budgeting approach, prepare a performance report for the cutting department for September 2016, comparing actual overhead costs with budgeted overhead costs for 5,580 hours. Separate overhead costs into variable and fixed components and show the amounts of any variances between actual and budgeted amounts.

Do not use negative signs with your answers below. Do not round until your final answer. Round answers to nearest whole number, if applicable. Select either U for Unfavorable or F for Favorable using the drop down box next to each of your variance answers.

Liberty Manufacturing Company Polishing Department Performance Report - Manufacturing Overhead For the Month Ended September 30, 2016
Actual Costs

Budget

(5,580 hours)

Variances
Variable costs:
Factory supplies $Answer $Answer $Answer AnswerFU
Indirect labor Answer Answer Answer AnswerFU
Utilities Answer Answer Answer AnswerFU
Patent royalties Answer Answer Answer AnswerFU
Total variable overhead Answer Answer Answer AnswerFU
Fixed costs:
Supervisory salaries Answer Answer Answer AnswerFU
Depreciation on equipment Answer Answer Answer
Factory taxes Answer Answer Answer AnswerFU
Factory insurance Answer Answer Answer
Utilities Answer Answer Answer AnswerFU
Total fixed overhead Answer Answer Answer AnswerFU
Total overhead costs $Answer $Answer $Answer AnswerFU

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