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Flexible Budget The controller for Muir Company's Salem plant is analyzing overhead in order to determine appropriate drivers for use in flexible budgeting. She decided

Flexible Budget

The controller for Muir Company's Salem plant is analyzing overhead in order to determine appropriate drivers for use in flexible budgeting. She decided to concentrate on the past 12 months since that time period was one in which there was little important change in technology, product lines, and so on. Data on overhead costs, number of machine hours, number of setups, and number of purchase orders are in the following table.

Month Overhead Costs Machine Hours Number of Setups Number of Purchase Orders
January $ 32,296 1,000 20 216
February 31,550 930 18 250
March 36,280 1,100 21 300
April 36,867 1,050 23 270
May 36,790 1,170 22 285
June 37,800 1,200 25 240
July 40,024 1,235 27 237
August 39,256 1,190 24 303
September 33,800 1,070 20 255
October 33,779 1,210 22 195
November 37,225 1,207 23 270
December 27,500 1,084 15 150
Totals $423,167 13,446 260 2,971

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1. Calculate an overhead rate based on machine hours using the total overhead cost and total machine hours. (Round the overhead rate to the nearest cent and predicted overhead to the nearest dollar.) Use this rate to predict overhead for each of the 12 months.

Overhead rate: $fill in the blank _______ per machine hour

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Prepare a flexible budget for overhead for the 12 months. If there is no variance, enter "0" for the amount and select "NA" in the last column. Enter all amounts as postive values.

image text in transcribedimage text in transcribed Muir Company Flexible Budget for Overhead 2. Run a regression equation using only machine hours as the independent variable. Prepare a flexible budget for overhead for the 12 months using the results of this regression equation. (Round the intercept and x-coefficient to the nearest cent and predicted overhead amount to the nearest dollar.) If there is no variance, enter "0" for the amount and select "NA" in the last column. Enter all your answers as positive amounts. Muir Company Flexible Budget for Overhead

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