Question
. Glenda Company uses a flexible budget for manufacturing overhead based on direct labor hours. For 2020, the master overhead budget for the Packaging Department
. Glenda Company uses a flexible budget for manufacturing overhead based on direct labor hours. For 2020, the master overhead budget for the Packaging Department based on 300,000 direct labor hours was as follows.
Prepare flexible budget report.
Variable Costs | Fixed Costs | ||||
Indirect labor | $360,000 | Supervision | $60,000 | ||
Supplies and lubricants | 150,000 | Depreciation | 24,000 | ||
Maintenance | 210,000 | Property taxes | 18,000 | ||
Utilities | 120,000 | Insurance | 12,000 | ||
$840,000 | $114,000 |
During July, 24,000 direct labor hours were worked. The company incurred the following variable costs in July: indirect labor $30,200, supplies and lubricants $11,600, maintenance $17,500, and utilities $9,200. Actual fixed overhead costs were the same as monthly budgeted fixed costs.
Instructions
Prepare a flexible budget report for the Packaging Department for July
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