Flexible Budget for Various Production Levels

Ladan Suriman, controller for Healthy Pet Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of dog food. BasicDiet is a standard mixture for healthy dogs. SpecialDiet is a reduced protein formulation for older dogs with health problems. The two dog foods use common raw materials in different proportions. The company expects to produce $80,000$ bags of each product during the coming year. BasicDiet requires $0\mathrm{.}20$ direct labor hour per bag, and SpecialDiet requires $0\mathrm{.}30$ direct labor hour per bag. Ladan has developed the following fixed and variable costs for each of the four overhead items:

Overhead Item Fixed Cost Variable Rate per Direct

Labor Hour

Maintenance $ $57,250$ $$0\mathrm{.}50$

Power $0\mathrm{.}40$

Indirect labor $43,5002\mathrm{.}10$

Rent $39,000$

Required:

Question Content Area

$1.$ Calculate the direct labor hours required for production that is $10\%$ higher than expected.

fill in the blank $97$dcb$2$f$9$a$011$fe$2\_1$ hours

Calculate the direct labor hours required for production that is $20\%$ lower than expected.

fill in the blank $97$dcb$2$f$9$a$011$fe$2\_2$ hours

Question Content Area

$2.$ Prepare an overhead budget that reflects production that is $10\%$ higher than expected. $($Hint: Use total direct labor hours calculated in Requirement $1.)$

Healthy Pet Company

Overhead Budget

For the Coming Year

blank Rates per Hour Hours $(10\%$ higher than expected$)$ blank blank

Variable costs: blank blank blank blank

Maintenance $fill in the blank f$1$b$71$c$0$b$300$efad$\_1$ $fill in the blank f$1$b$71$c$0$b$300$efad$\_2$ blank blank

Power fill in the blank f$1$b$71$c$0$b$300$efad$\_3$ fill in the blank f$1$b$71$c$0$b$300$efad$\_4$ blank blank

Indirect labor fill in the blank f$1$b$71$c$0$b$300$efad$\_5$ fill in the blank f$1$b$71$c$0$b$300$efad$\_6$ blank blank

Total variable cost blank blank $fill in the blank f$1$b$71$c$0$b$300$efad$\_7$ blank

Fixed costs: blank blank blank blank

Maintenance blank $fill in the blank f$1$b$71$c$0$b$300$efad$\_8$ blank blank

Indirect labor blank fill in the blank f$1$b$71$c$0$b$300$efad$\_9$ blank blank

Rent blank fill in the blank f$1$b$71$c$0$b$300$efad$\_10$ blank blank

Total fixed costs blank blank fill in the blank f$1$b$71$c$0$b$300$efad$\_11$ blank

Total overhead costs blank blank $fill in the blank f$1$b$71$c$0$b$300$efad$\_12$ blank

blank

Question Content Area

Prepare an overhead budget that reflects production that is $20\%$ lower than expected. $($Hint: Use total direct labor hours calculated in Requirement $1.)$

Healthy Pet Company

Overhead Budget

For the Coming Year

blank Rates per Hour Hours $(20\%$ fewer than expected$)$ blank blank

Variable costs: blank blank blank blank

Maintenance $fill in the blank f$53$fbcfe$9$ffafcd$\_1$ $fill in the blank f$53$fbcfe$9$ffafcd$\_2$ blank blank

Power fill in the blank f$53$fbcfe$9$ffafcd$\_3$ fill in the blank f$53$fbcfe$9$ffafcd$\_4$ blank blank

Indirect labor fill in the blank f$53$fbcfe$9$ffafcd$\_5$ fill in the blank f$53$fbcfe$9$ffafcd$\_6$ blank blank

Total variable cost blank blank $fill in the blank f$53$fbcfe$9$ffafcd$\_7$ blank

Fixed costs: blank blank blank blank

Maintenance blank $fill in the blank f$53$fbcfe$9$ffafcd$\_8$ blank blank

Indirect labor blank fill in the blank f$53$fbcfe$9$ffafcd$\_9$ blank blank

Rent blank fill in the blank f$53$fbcfe$9$ffafcd$\_10$ blank blank

Total fixed costs blank blank fill in the blank f$53$fbcfe$9$ffafcd$\_11$ blank

Total overhead costs blank blank $fill in the blank f$53$fbcfe$9$ffafcd$\_12$ blank

blank

$...$