Gonzalez Company produces one product, Olpe. Because of wide fluctuations in demand for Olpe, the Assembly Department experiences significant variations in monthly production levels.

The annual master manufacturing overhead budget is based on 300,000 direct labor hours. In July, 27,500 labor hours were worked. The master manufacturing overhead budget for the year and the actual overhead costs incurred in July are as follows.

Overhead costs Master Budget ( Actual ) Actual in July

Variable

Indirect labor $ 300000 $ 26000

Indirect materials 150000 11350

Utilities 90000 8050

Maintenance 60000 5400

Fixed

Supervision 144000 12000

Depreciation 96000 8000

Insurance and taxes 60000 5000

___________ ___________

Total $ 900000 $ 75800

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Instructions

(a) Prepare monthly flexible overhead budget for the year ending December 31,2017, assuming monthly production levels range from 22,500 to

30,000 direct labor hours. Use increments of 2,500 direct labor hours.

(b) Prepare budget report for the month of July 2017, comparing actual results with budget data based on the flexible budget.

(c) Were costs effectively controlled? Explain.

(d) State the formula for computing the total monthly budgeted costs in the Gonazalez company.

Please provide me complete answers with working for all the questions.