Halle Brothers Water Pump Company, Inc. uses a flexible budget for manufacturing overhead based on machine hours. Variable manufacturing overhead costs per machine hour are as follows:

Indirect labor$5.00

Indirect materials2.50

Maintenance.80

Utilities.30

Fixed overhead costs per month are:

Supervision$2,800

Insurance1,200

Property taxes700

Depreciation1,500

The company believes it will normally operate in a range of 2,000 to 5,000 machine hours per month.

Required

2. Prepare a budget report with variances based on the actual costs incurred as detailed below when the company operated in April 2020 at a level of 3,200 machine hours.

Indirect labor$16,800

Indirect materials 7,680

Maintenance 2,880

Utilities 1,600

Fixed overhead costs per month are:

Supervision$3,080

Insurance1,200

Property taxes735

Depreciation1,500