Hello Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead cost per direct labor hour are as follows:

Indirect materials $1.20

Indirect labor $2

Utilities $0.80

Fixed overhead costs per month are supervision $5,000, depreciation $1,300 and property taxes $900. The company believes it will operate in a range of 6,000-10,000 direct labor hours per month.

Prepare a manufacturing overhead flexible budget for 2016 for the expected range of activity, using increments of 1,000 direct labor hours.

Hello Company incurs (actual costs) the following manufacturing overhead costs:

Variable:

Indirect labor $14,000

Indirect materials $7,000

Utilities $4,00

Fixed:

Supervision $5,500

Depreciation $1,100

Property taxes $5,000

Prepare a flexible budget performance report, assuming that the company worked 9,000 direct labor hours during the month.

Assuming the following costs are not controllable, prepare a responsibility report based on the flexible budget performance report prepared above:

Utilities, depreciation, & property taxes.