Magellents enllclency in CUILLg t o P22-2B Zelmer Company man result, the president has installed a bud the master manufacturing direct labour hours. pany manufactures tablecloths, Sales have grown rapidly over the past two years. As a Prepare flexible budget, nstalled a budgetary control system for 2017. The following data were used in developing budget report, and graph for caning overhead budget for the ironing department, which is based on an activity index of manufacturing overhead. (LO 3) AN Variable Costs Indirect labour Indirect materials Factory utilities Factory repairs Rate per Direct Labour Hour $0.40 0.50 0.30 0.20 Annual Fixed Costs Supervision $48,000 Depreciation 18,000 Insurance 12,000 Rent 30,000 CHAPTER 22 Budgetary Control and Responsibility Accounting The master overhead budget was prepared on the expectation that 480,000 direct labour hours will be worked during the year. In June, 41,000 direct labour hours were worked. At that level of activity, actual costs were as follows. Variable-per direct labour hour Indirect labour $0.44 Indirect materials $0.48 Factory utilities $0.32 Factory repairs $0.25 Fixed: same as budgeted. Instructions (a) Prepare a monthly flexible manufacturing overhead budget for the year ending December 31, 2017, assuming production levels range from 35,000 to 50,000 direct labour hours. Use increments of 5,000 direct labour hours. (b) Prepare a budget performance report for June comparing actual results with budget data based on the flexible budget. (c) Were costs effectively controlled? Explain. (d) State the formula for calculating the total budgeted costs for Zelmer Company, (e) Prepare the flexible budget graph, showing total budgeted costs at 35,000 and 45,000 direct labour hours. Use increments of 5,000 direct labour hours on the horizontal axis and increments of $10,000 on the vertical axis