Question
Martinez Company uses a flexible budget for manufacturing overhead based on direct labor hours. Budgeted variable manufacturing overhead costs per direct labor hour are
Martinez Company uses a flexible budget for manufacturing overhead based on direct labor hours. Budgeted variable manufacturing overhead costs per direct labor hour are as follows. Indirect labor $1.00 Indirect materials 0.70 Utilities 0.40 Budgeted fixed overhead costs per month are Supervision $3,840, Depreciation $1,152, and property Taxes $768. The company believes it will normally operate in a range of 6,720-9,600 direct labor hours per month Assume that in July 2022, Martinez Company incurs the following manufacturing overhead costs. Variable Costs Fixed Costs Indirect labor $8,448 Supervision $3,840 Indirect materials Utilities 5,568 Depreciation 1,152 3.072 Property taxes 768 (a) Prepare a flexible budget performance report, assuming that the company worked 8,640 direct labor hours during the month. (List variable costs before fixed costs.)
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